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Gold consolidates heading into the EU session

December 2, 2020

New York (Dec 2)  After a very strong session on Tuesday gold is trading flat leading into the EU open. Silver is slightly worse off trading half a percent lower at $23.84 per ounce. The general risk tone overnight has been very tight with the Nikkei 225 (0.05%), ASX (0.03%) and Shanghai Composite (-0.07%) all closing in close proximity of their opening levels.

One of the main stories from China comes from the incoming US administration. It has been reported this morning that Joe Biden will not repeal the Chinese tariffs straight away. The report from the NY Times stated he wants to review the existing deal with the worlds second-largest economy before making a decision.

There has also been some stimulus talk from the ECB. ECB's Kazaks said the forecast of a €500 billion PEPP boost not very off the mark. This was in reference to the upcoming meeting in December. Analysts are looking at a few potential ECB actions including an extension to TLRTOs from 3 years to 5 years and adding other assets to TLTRO collateral.

In terms of data from the Asian session, the market was treated to the latest Australian GDP numbers. The Q/Q figure came in at 3.3% for Q3 beating expectations of 2.6%. Yes, the technical recession may be over but just like many other nations its too early to say the economy is out of the wood yet as the nations count the cost from the COVID-19 pandemic.

There has been some positive news regarding the COVID-19 vaccine as the UK has approved Pfizer-BioNTech coronavirus vaccine for use. It has been said the first U.S. shipments of BioNTech and Pfizer’s coronavirus vaccine will be delivered on Dec. 15.

KitcoNews

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