Wednesday (January 6) in the Asian session, the dollar index was basically stable, is now around 89.50; Spot gold fell modestly, trading around $1,945 an ounce. Investors are still awaiting the outcome of a runoff election in Georgia that will determine control of the U.S. Senate, which could affect the prospects for more fiscal stimulus, which could have an impact on assets such as the dollar and gold. Gold has rallied from an intraday low near $1,941 an ounce on news that the Democrats have claimed victory in one of two key US Senate runoff races. In addition to continuing to focus on the final results of the Georgia runoff, investors are bracing for a pivotal moment in the U.S. presidential election: January 6, when Congress meets in a joint session to count and certify the electoral votes for the 2020 presidential election.
Gold hit a two-month high on Tuesday, buoyed by a weaker US dollar and rising concerns about the new crown. Spot gold settled at $1,949.86 an ounce, up $7.11, or 0.37 percent, after hitting $1,953.04, its highest since Nov. 9. Analysts point out that the main drivers of gold’s rise remain — fiscal stimulus measures, loose monetary policy, a weaker dollar, inflation fears and fears of currency depreciation. Gold’s gains have also been sustained by an increase in confirmed new cases and slower than expected vaccination.
“In the short term, we see people moving money to safe havens, given the increased risk associated with the virus,” said Chris Gaffney, president of global markets at TIAA Bank. He added that the weakness of the US dollar in the first few days of 2021 had been one of the main factors supporting gold prices.
Britain went into a new national lockdown as new cases of the infection increased. According to the U.S. Department of Health, a novel Coronavirus variant found in the United Kingdom has been detected in Georgia. The case has no travel history and is being quarantined. The mutant strain of the virus has been found in five US states, including Georgia, California, New York, Florida and Colorado. Officials from the Centers for Disease Control and Prevention said last week that the mutated virus has spread “human-to-human” in the United States.
Markets await Georgia runoff results
Georgia will hold a U.S. Senate runoff election on Tuesday that will determine whether Republicans or Democrats will take control of the U.S. Senate. Democrats need to win both seats to take control of both chambers. According to the latest reports on January 6, US Democratic Senator John Warnock won the Georgia Senate election.
The U.S. Senate is made up of two senators from each of the 50 states. After the 2020 election, including two independents who voted with the Democrats, Democrats now hold 48 seats in the Senate, while Republicans hold 50. In Georgia, where no Senate candidate won a majority in the general election, state law requires a run-off election for two Senate seats. U.S. President Donald Trump and Joe Biden went to Georgia to rally support for their party’s candidate.
The Democratic Party claimed victory in one of two key U.S. Senate runoff races, AFP reported on Thursday.
According to the latest NBC count, with 98 percent of the ballots counted, the special Senate race in Georgia had Democratic Senator John Warnock with 50.4 percent of the vote and Republican incumbent Robert Loeffler with 49.6 percent. In addition, Republican challenger Perdue and Democratic challenger Ossoff each had 50 percent of the vote, with 98 percent of the ballots counted.
Georgia is expected to announce the results of its Senate race early Wednesday Eastern (Wednesday evening Hong Kong time), the state’s secretary of state said.
If Democrats win the two races, they could wrest control of the Senate from Republicans, paving the way for further stimulus, which would be good for gold. Many investors see nonyielding gold as a hedge against inflation and currency depreciation that they fear could result from massive stimulus measures.
“People are very divided about the Georgia election,” said Edward Moya, senior market analyst at Oanda in New York. “People are confused about the outcome.”
A two-seat Democratic win in Georgia would make it easier for the Biden administration to pass legislation that could affect the stock market, including the repeal of corporate tax cuts enacted by the Trump administration, MarketWatch reported.
Jeff Wright, executive vice president at GoldMining, said gold was being helped by uncertainty over the Georgia Senate runoff election, as the market worried that Democrats would push for more aggressive tax policies if they took control of both chambers.
Avtar Sandu, senior commodity manager at Phillip Futures, said in a note that fiscal policy is likely to remain accommodative under a Democratic-controlled Senate, which would weigh on the dollar and benefit precious metals.
OANDA analyst Edward Moya said in a research note that the eventual bipartisan control of the U.S. Senate, as well as Biden’s post-presidency bailout measures, will be the next driving force for gold.
Jeffrey Sica, founder of Circle Squared Alternative Investments, said: “We could see significant stimulus, which would cause the dollar to fall further. “This week’s Senate election could be a major disruptive event and gold will rally on that.”
“Tuesday’s Georgia Senate runoff election is crucial for the dollar as Democrats winning two seats in the Senate could lead to more stimulus, which only means more pain for the dollar,” said Hussein Sayed, chief market strategist at FXTM in New York.
Commerzbank analyst Daniel Briesemann said: “A lot will depend on the outcome of the run-off election in the US state of Georgia, where market players are definitely hoping for Democrats to pick up two seats. This will mean Biden can continue with the expansionary fiscal policies he has announced, which will be positive for gold.”
Wells Fargo said that if Democrats win two Senate seats in Georgia, the likelihood of more fiscal stimulus and epidemic relief proposals would be positive for stocks.
Tom Essaye, founder of The Sevens Report, writes: “If both Democratic candidates win, The Georgia Senate runoff could have a major impact on The markets. We don’t think the arrival of Democrats in the Senate will change the bearish picture in the short term, as there are still a lot of positive factors in this market. But it would be a new and unexplained headwind to the stock market initially.”
The U.S. Congress will certify the election results
On January 6, the U.S. Congress will convene in a joint session to formally count the electoral votes, certify the electoral college and declare the official results of the presidential election. The US Senator Ted Cruz says he will join nearly a dozen Republican senators in a renewed challenge to the victory of the Democratic presidential candidate Joe Biden. In addition, at least 140 House Republicans will oppose the outcome of the Electoral College vote, sources said.
Notably, there are two sets of Electoral College votes in the seven swing states, presented by electoral colleges chosen by state capitals and state legislatures. So the joint meeting on January 6th became quite remarkable.
As president of the Senate, Vice President Mike Pence will chair a joint session of Congress on Sunday to oversee the certification of the Electoral College vote, according to the constitutional procedure. After a mahogany box containing the electoral votes of all 50 states arrives at Congress, Pence will oversee the process of certifying the Electoral College vote, declaring the person with the highest number of votes to be president. During the process, the announcement of the results will be delayed if there are objections from lawmakers to the electoral votes.
Under the Electoral Counting Act, if at least one member of the House and Senate makes a written objection to a particular state’s electoral votes, members of both chambers are allowed to withdraw for no more than two hours, and lawmakers have a maximum of five minutes to voice their “yes” or “no.” A written objection is admissible only if it is approved by a simple majority in both chambers. If both the House and Senate vote by a majority in favor of the opposition, the opposition stands and the challenged state’s electoral vote is invalidated.
On December 30, 2020, Senator Josh Hawley announced that he would be the challenger for January 6. “At the very least, Congress should investigate allegations of voter fraud and take steps to uphold the integrity of the elections,” Hawley said. But Congress has not acted so far.” But he declined to say which states he would challenge for electoral votes. Hawley is the first member of Congress to formally and publicly announce plans for a challenge.
At least 140 House Republicans will vote against the results of the Election Committee on January 6, a Senate source told Forbes on December 31, 2020.
On January 2 local time, 11 Republican senators, led by Texas Senator Ted Cruz, will challenge Biden’s results on January 6. Cruz and other senators claimed that the Nov. 3 election was “marked by unprecedented allegations of voter fraud and illegality.”
U.S. President Donald Trump on Tuesday tweeted that Vice President Mike Pence “has the right to deny electors who were chosen by fraud.” Trump asked Pence to overturn the Electoral College results at a joint meeting on Saturday, and Trump’s demand was for Pence to take steps beyond the limits of the Constitution.
Under the 12th Amendment of the United States, the President of the United States Senate, in the presence of members of both houses of Congress, will open all certificates submitted by the Electoral College and count all votes. The 12th Amendment also says that when there is ambiguity or potential policy disagreement, the Speaker of the Senate will have the power to decide decisively.
Donald Miller, a senior adviser to the Trump campaign, told Newsmax that they plan to present all evidence of election fraud during the debate, which is different from what the team has submitted to the court over the past few weeks.
On January 4, US Vice President Mike Pence said: “I know we all have our doubts about this election. I promise you, come to Washington, DC this Wednesday, and we will have a great day in the Congress. We will hear dissent, we will listen to evidence.”
Pence’s chief of staff said last week that Pence welcomed efforts by members of Congress to challenge the results of the Jan. 6 election, saying that he “shares at least millions of Americans’ concerns about voter fraud and electoral process irregularities in this election.”
US President Donald Trump said on Tuesday that he will attend a protest in Washington, DC, on January 6. Donald Trump will deliver a speech to supporters in Washington on the morning of January 6, according to his latest tweet on Tuesday night.