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Gold price rises as Fed delays tapering plans but pushes rate hike expectations to 2022 – Kitco NEWS

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(Kitco News) – The gold market is struggling to find some direction with prices below $1,800 an ounce as the Federal Reserve holds back on releasing its plans to reduce its monthly bond purchase for at least another meeting.

“Last December, the Committee indicated that it would continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage-backed securities by at least $40 billion per month until substantial further progress has been made toward its maximum employment and price stability goals. Since then, the economy has made progress toward these goals. If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted,” the central bank said in its monetary policy statement.

The delayed tapering plans come as the Federal Reserve also leaves interest rates unchanged at the zero-bound range, as expected. However, the U.S. central bank is still looking to tighten its monetary policies. According to the latest economic projections, it sees the first potential interest rate hike in 2022.

Adam Button, chief currency strategist at Forexlive.com, described the new dot plot estimates as hawkish.

Despite the hawkish outlook, gold prices are seeing some renewed buying interest following the Federal Reserve’s monetary policy meeting. December gold futures last traded at $1,779.30 an ounce.

The Federal Reserve’s outlook on current economic activity hasn’t changed since the summer, with the committed seeing continued strengthening.

Although the Federal Reserve has delayed its tapering plans this meeting, some analysts note that committee interest rate projections could be holding gold below $1,800 an ounce. Looking at the projections, also called the dot plots, the Committee sees interest rates rising to 0.3% in 2022, up from the previous estimate of 0.1%. This would signal that the central bank sees at least one rate hike next year.

For 2023 the median estimate for interest rates is 1%, up from the June forecast of 0.6%. For 2024 the central bank sees interest rates at 1.8%.

Despite the comments in the monetary policy statement, the central bank committee has downgraded its growth expectations for the rest of 2021. According to updated economic projections, the Federal Reserve sees the U.S. gross domestic product growing 5.9% this year, down from 7% forecasted in June. Economic growth next year has been revised higher to 3.8%, up from the previous projection of 3.3%. The economy is expected to grow 2.5% in 2023, up one tick from June’s estimate of 2.4%. In the first look for 2024, the central bank sees GDP growing 2%.

The U.S. central bank is also paring back its optimism in the labor market. For 2021 the unemployment rate is expected to fall to 4.8%, compared to December’s forecast of 4.5%. For next year, the unemployment rate is expected to be 3.8%, unchanged from the previous forecast. In 2023 the unemployment rate is expected to fall to 3.5%, also unchanged from June’s estimate. For 2024 the unemployment rate is expected to hold steady at 3.5%.
The U.S. central bank is also forecasting higher inflation pressure. The projections show that the Personal Consumption Expenditures Index (PCE) is expected to rise 4.2% in 2021, up from June’s estimate of 3.4%. Inflation pressures are expected to continue to grow in 2022, with PCE increasing 2.2%, up from June’s estimate of 2.1%. In 2023, the Federal Reserve expects inflation to hold at 2.2%. By 2024 consumer prices pressure are expected to moderate, rising 2.1%.

Core inflation expectations, which strip out volatile food and energy prices, are expected to rise 3.7% this year, up compared to the previous estimate of 3.0%. Next year, core inflation is expected to rose 2.3%, compared to June’s forecast of 2.1%. In 2023, inflation is expected to rise to 2.2%, up from the previous estimate of 2.1%. Inflation is expected to moderate to 2.1% in 2024.

Avery Shenfeld, senior economist at CIBC, also described the latest monetary policy statement as slightly hawkish. He added that he expects the central bank will release its tapering plans at the November monetary policy meeting.

“While it’s clear that the members of the committee think they will start tapering before year-end, they didn’t want to commit to do so just in case the issues with the virus deepen,” he said in a note to clients. “we’ll stick with a view that the tapering announcement is made at the next meeting, and begins before year-end.”

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First U.S. futures-based bitcoin ETF begins trading, bitcoin nears record

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The first U.S.  bitcoin futures-based exchange-traded fund began trading on Tuesday, sending bitcoin to a six-month high and within striking distance of its all-time peak, as traders bet the ETF could boost investment flows into cryptocurrencies.

The ProShares Bitcoin Strategy ETF began trading on Intercontinental Exchange Inc’s NYSE Arca on Tuesday under the ticker BITO after being greenlighted by the U.S. Securities and Exchange Commission.

Bitcoin futures have been overseen by the Commodity Futures Trading Commission for four years and ETFs – securities that track an asset and can be bought or sold on a stock exchange – are regulated by the SEC, offering some level of investor protection, SEC chair, Gary Gensler, said on Tuesday.

“Yet it’s still a highly speculative asset class and investors should understand that underneath, there is the same volatility and speculation,” he told CNBC.

Bitcoin, the world’s biggest cryptocurrency, touched $63,337.54 after the listing, its highest since mid-April and near its record of $64,895.22.

Known throughout its 13-year life for its volatility, bitcoin has risen by some 40% this month on hopes the advent of bitcoin ETFs – of which several are in the works – will see billions of dollars managed by pension funds and other large investors flow into the sector.

The BITO ETF was last at $40.95, up slightly from its $40.88 open.

“It has traded tightly, within a penny of fair value pretty much all morning, so it’s part of the ecosystem,” said Dave Nadig, chief investment officer and director of research at ETF Trends.

The ETF had traded around $500 million worth, notionally, by late morning, which is “about what we would expect for a media-darling first launch in the space,” he said.

Much of BITO’s initial volume appeared to be from retail investors, as there were only four block trades, above 10,000 shares, all morning, Nadig said.

Nasdaq Inc on Friday approved the listing of the Valkyrie Bitcoin Strategy ETF, and Grayscale, the world’s largest digital currency manager, plans to convert its Grayscale Bitcoin Trust into a spot bitcoin ETF, the company confirmed.

Crypto ETFs have launched this year in Canada and Europe amid surging interest in digital assets. VanEck and Valkyrie are among fund managers pursuing U.S.-listed ETF products, although Invesco on Monday dropped its plans for a futures-based ETF.

The SEC has yet to approve a spot bitcoin ETF.

Bitcoin futures were up 2.21% at $63,035.

(Reporting by John McCrank in New York, Tom Wilson in London; additional reporting by Tom Westbrook in Singapore and Katanga Johnson in Washington; Editing by Kim Coghill, Jason Neely and Andrea Ricci)

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Why COVID-19 boosters weren't tweaked to better match variants – CTV News

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More COVID-19 booster shots may be on the way — but when it’s your turn, you’ll get an extra dose of the original vaccine, not one updated to better match the extra-contagious delta variant.

And that has some experts wondering if the booster campaign is a bit of a missed opportunity to target delta and its likely descendants.

“Don’t we want to match the new strains that are most likely to circulate as closely as possible?” Dr. Cody Meissner of Tufts Medical Center, an adviser to the Food and Drug Administration, challenged Pfizer scientists recently.

“I don’t quite understand why this is not delta because that’s what we’re facing right now,” fellow adviser Dr. Patrick Moore of the University of Pittsburgh said last week as government experts debated whether it’s time for Moderna boosters. He wondered if such a switch would be particularly useful to block mild infection.

The simple answer: The FDA last month OK’d extra doses of Pfizer’s original recipe after studies showed it still works well enough against delta — and those doses could be rolled out right away. Now the FDA is weighing evidence for boosters of the original Moderna and Johnson & Johnson vaccines.

“It’s less churn and burn on the manufacturing” to only switch formulas when it’s really necessary, said FDA vaccine chief Dr. Peter Marks.

But Pfizer and Moderna are hedging their bets. They’re already testing experimental doses customized to delta and another variant, learning how to rapidly tweak the formula in case a change eventually is needed — for today’s mutants or a brand new one. The tougher question for regulators is how they’d decide if and when to ever order such a switch.

What we know so far:

CURRENT VACCINES ARE WORKING EVEN AGAINST DELTA

Vaccines used in the U.S. remain strongly effective against hospitalization and death from COVID-19, even after the delta variant took over, but authorities hope to shore up waning protection against less severe infection and for high-risk populations. Studies show an extra dose of the original formulas revs up virus-fighting antibodies that fend off infection, including antibodies that target delta.

MIGHT A DELTA-SPECIFIC BOOSTER WORK EVEN BETTER?

Vaccines target the spike protein that coats the coronavirus. Mutations in that protein made delta more contagious but to the immune system, it doesn’t look all that different, said virus expert Richard Webby of St. Jude Children’s Research Hospital.

That means there’s no guarantee a delta-specific booster would protect any better, said University of Pennsylvania immunologist John Wherry. Waiting for studies to settle that question — and if necessary, brewing updated doses — would have delayed rolling out boosters to people deemed to need them now.

Still, because delta is now the dominant version of the virus worldwide it almost certainly will be a common ancestor for whatever evolves next in a mostly unvaccinated world, said Trevor Bedford, a biologist and genetics expert at the Fred Hutchinson Cancer Research Center.

A delta-updated vaccine would “help to provide a buffer against those additional mutations,” he said. Bedford is paid by the Howard Hughes Medical Institute, which also supports The Associated Press Health and Science Department.

TWEAKING THE RECIPE

The Pfizer and Moderna vaccines are made with a piece of genetic code called messenger RNA that tells the body to make harmless copies of the spike protein so it’s trained to recognize the virus. Updating the formula merely requires swapping out the original genetic code with mRNA for a mutated spike protein.

Both companies first experimented with tweaked doses against a mutant that emerged in South Africa, the beta variant, that has been the most vaccine-resistant to date, more so than the delta variant. Lab tests showed the updated shots produced potent antibodies. But the beta variant didn’t spread widely.

Now the companies have studies underway of fully vaccinated people who agreed to test a booster dose tweaked to match delta. Moderna’s studies also include some shots that combine protection against more than one version of the coronavirus — much like today’s flu vaccines work against multiple influenza strains.

The mRNA vaccines are considered the easiest kind to tweak but some other vaccine makers also are exploring how to change their recipes if necessary.

WHY STUDY UPDATED SHOTS IF THEY’RE NOT YET NEEDED?

Moderna’s Dr. Jacqueline Miller told an FDA advisory panel last week the company is studying variant-specific boosters now to learn if they offer advantages, and to be ready if they’re needed.

And Penn’s Wherry said it is critical to carefully analyze how the body reacts to updated shots because the immune system tends to “imprint” a stronger memory of the first virus strain it encounters. That raises questions about whether a subtly different booster would prompt a temporary jump in antibodies the body’s made before — or the bigger goal, a broader and more durable response that might even be better positioned for the next mutations to come along.

NO RULES YET FOR MAKING A SWITCH

“What is the tripping point?” asked Webby, who is part of a World Health Organization network that tracks influenza evolution. “A lot of what is going to need to go into that decision making is just going to be learned by experience, unfortunately.”

Bedford said now is the time to decide what drop in vaccine effectiveness would trigger a formula change, just as is done with flu vaccines every year.

That’s important not just if a dramatically worse variant suddenly develops. Like many scientists, Bedford expects the coronavirus to eventually evolve from a global crisis into a regular threat every winter — which might mean more regular boosters, maybe even yearly in combination with the flu shot.

Timing between shots matters, too, Wherry noted.

“Your boostability may actually improve with longer intervals between stimulation,” he said. While scientists have learned a lot about the coronavirus, “the story’s not finished yet and we don’t know what the last chapters say.”

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Pfizer officially requests Health Canada approval for kids' COVID-19 shot – CP24 Toronto's Breaking News

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Laura Osman, The Canadian Press


Published Monday, October 18, 2021 4:50PM EDT


Last Updated Monday, October 18, 2021 8:34PM EDT

OTTAWA – Pfizer-BioNTech has asked Health Canada to approve the first COVID-19 vaccine for children aged five to 11 years old.

The vaccine was developed in partnership with Germany’s BioNTech and is now marketed under the brand name Comirnaty. It was authorized for people at least 16 years old last December, and for kids between 12 and 15 in May.

Pfizer already submitted clinical trial data for its child-sized dose to Health Canada at the beginning of the month. The company said the results were comparable to those recorded in the Pfizer-BioNTech study in people aged 16 to 25.

Health Canada said it will prioritize the review of the submission, while maintaining high scientific standards for safety, efficacy and quality, according to a statement from the department.

“Health Canada will only authorize the use of Comirnaty if the independent and thorough scientific review of all the data included in the submission showed that the benefits of the vaccine outweighed the potential risks in this age group,” the statement read.

The doses are about one-third the size given to adults and teens age 12 and up.

As soon as the regulator gives the green light, providers will technically be able to start offering the COVID-19 shot to kids, though new child-sized doses might need to be procured.

Pfizer has delivered more than 46 million doses to Canada to date, and an analysis of the available data on administration from provincial and federal governments suggests there are more than enough Pfizer doses already in Canada to vaccinate kids between five and 11 years old.

But simply pulling smaller doses from the vials Canada already had stockpiled across the country may not be advised, chief public health officer Dr. Theresa Tam said at a media briefing late last week.

“We also understand from Pfizer that this actual formulation has shifted, this is a next generation formulation, so that is something that needs to be examined by the regulator,” Tam said Friday.

Canada signed a new contract with Pfizer for pediatric doses last spring.

The Pfizer-BioNTech vaccine has also been tested on children as young as six months old. Topline data for children under five years old is expected as soon as the end of the year.

Health Canada said it expects to receive more data for review from Pfizer for younger age groups, as well as other manufacturers for various age ranges in the coming months.

The Public Health Agency of Canada has noted rare incidents of myocarditis, an inflammation of the heart muscle, after receiving an mRNA vaccine like Pfizer-BioNTech and Moderna.

As of Oct. 1, Health Canada has documented 859 cases associated with the vaccines, which mainly seem to affect people under 40 year old. On balance, the risk appears to be low, according to Tim Sly, a Ryerson University epidemiologist with expertise in risk management.

“Of course, no one considers any complication in a child to be acceptable, and a tremendous amount of caution is being taken to look for and identify all problems,” said Sly in a recent email exchange with The Canadian Press.

COVID-19 infection also produces a very high risk of other cardiovascular problems, he said.

Aside from protecting kids against more serious symptoms of COVID-19, the vaccine would also reduce the risk of a child passing the virus on to a vulnerable family member and make for a better school environment with less stress about transmission.

Once the vaccine is approved for kids, the National Advisory Committee on Immunization will weigh in on whether the benefits of the shot outweigh potential risks for young children.

This report by The Canadian Press was first published Oct. 18, 2021.

– With files from Mia Rabson

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