The Fed worries that a lack of fiscal stimulus could jeopardize the recovery. The only vice presidential debate to hit the U.S. market this morning. Is a Biden victory the biggest upside risk for gold?

Spot gold fluctuated in a narrow range in early Asian trading Thursday, edging higher to around $1,886 an ounce and hitting an intraday high of $1,888.22. The previous trading day, because the market of the United States will further stimulus measures to support the virus to crack down on economic concerns, the market also pay close attention to the fed’s last meeting record to look for clues about the prospect of monetary policy, spot gold closed at $1895.80 an ounce, up $8.04, or 0.43%, highest intraday hit $1897.80 an ounce, minimum hit $1872.66 an ounce.

On the fed’s policy path, on the one hand, the minutes show that some members felt it would be appropriate to conduct bond-buying assessments at future meetings. On the other hand, the Fed continues to call on the administration and Congress to strengthen the fiscal support for the economy. The Fed was concerned about the risks to the economic recovery posed by another coVID-19 outbreak, and officials were concerned that current financial assistance measures were insufficient, according to the minutes. Many participants said the pace of recovery could be slower than expected if future financial support were much less than they had expected or came much later than they had expected.

According to the minutes of the meeting, some participants believed that savings from epidemic assistance funds could provide a greater incentive to spend than expected, but two commissioners did not believe this was possible. As for the OUTLOOK for the US economy, some members expressed concern about the long-term impact of coVID-19 on employment and participants generally expected spending on services to remain subdued for some time, dampening the pace of recovery, the minutes showed.

As for the much-watched forward guidance, the minutes noted that Fed officials did not see forward guidance as an unconditional commitment. Participants felt that, given the very low level of long-term interest rates, there did not seem to be much need for more forward guidance or much scope to put further downward pressure on yields. Officials also worry that the increased forward guidance could limit the committee’s flexibility for years.

‘The U.S. economic outlook is very uncertain and fiscal policy actions will be very useful in the short term,’ William Williams, the fed’s third-ranking official and President of the Federal Reserve Bank of New York, said at an event at the Hoover Institution at 03:00 Beijing time. Chicago Fed President Charles Evans said many risks and uncertainties remain in the U.S. economy, with inflation well below the 2 percent target and far from robust levels. Evans stressed that in the future, the extent of damage to the U.S. economy depends on additional financial assistance, and the Fed will use all the tools at its disposal to support the economy.

Republican vice presidential nominee Mike Pence and Democratic Vice presidential nominee Harry Harris will hold their first and only televised debate Thursday in Salt Lake City, Utah. As events such as justice Ginsburg’s death and President Trump’s new crown have rocked the final stages of the campaign, analysts say the vice-presidential contest has taken on greater importance.

market outlook

1.Standard Chartered says if Democratic presidential candidate Joe Biden wins, gold is the “biggest upside risk through the end of the year.” Despite Mr. Biden’s lead in the polls, the risk is not yet fully priced in the precious metals market. “Despite the polls, gold prices and positioning do not seem to fully reflect a Biden victory. Mr. Biden’s victory and complete control of Congress pose the biggest upside risks to gold. However, the macro backdrop continues to support further gains after the election, “said Suki Cooper, precious metals analyst at Standard Chartered Bank in New York on Wednesday. Cooper expects gold to recover to $2,000 an ounce in the fourth quarter of this year and climb to $2,100 in the first quarter of next year.

  1. “There was some short covering that took the market off its lows. “Gold is going back to $1,900, and the question of whether there will be a stimulus package is less about timing,” said Ross Norman, an independent analyst. “Democratic leaders are way ahead (in election polls), the markets are turning to what this means, and of course, if the Democrats succeed, they will push for a much larger economic stimulus package,” Norman said.
  2. “In general, this is a bond market reaction, with yields falling and the dollar slightly weaker against the euro,” said Peter Fertig, quantitative commodities research analyst. Fertig added that the uncertainty surrounding the upcoming U.S. election will provide support for gold.

4.Daniel Ghali, the commodity strategist at TD Securities in New York, said: “The reason the market wants a fiscal deal is because in our view gold has effectively shifted from a haven to an inflation hedge. As an inflation hedge, the bottleneck here is actually inflation expectations. Markets need to see them rise further to bring down real interest rates and lift gold prices.”

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