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Gold, silver see price pause ahead of Powell speech – Kitco NEWS

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(Kitco News) – Gold and silver prices are trading near steady in early U.S. trading Thursday, pausing after solid gains Wednesday and ahead of some key U.S. economic data due out this morning, highlighted by a speech from Federal Reserve Chairman Jerome Powell. October gold futures were last down $0.80 an ounce at $1,943.10. September Comex silver prices were last down $0.024 at $27.425 an ounce.

Global stock markets were mixed overnight. The U.S. stock indexes are pointed toward modestly weaker openings when the New York day session begins. After the S&P 500 and Nasdaq stock indexes hit record highs this week, U.S. traders and investors are now a bit more risk averse late this week, as racial tensions in America are on the rise again. Several professional sports teams opted not to play their games Wednesday, following police shooting an African American man in Wisconsin. Also, Hurricane Laura is set to inflict catastrophic damage on the Louisiana and eastern Texas coast Thursday, including a storm surge of sea water weather officials are calling “un-survivable.”

Focus of the marketplace today will also be on Federal Reserve Chairman Jerome Powell’s speech on the U.S. economy, as part of the annual Jackson Hole meeting that is this year virtual. The speech is scheduled to start at 9:10 a.m. eastern time. Many expect inflation to be a main topic of Powell’s speech. Said one analyst in a dispatch this morning: “So far, we have only seen rising prices in asset classes such as stocks in particular, but throughout the past decade, the consumer price index has averaged around 1.5%, so missing the Fed’s 2% inflation target. ‘Average inflation targeting’ is the new formula expected to be endorsed by Powell today. It’s a policy framework that allows inflation to run above or below the 2% target, but given that inflation has been running below target for several years, the objective would be to allow price rises to overshoot for more extended periods before tightening policy. However, the idea of allowing inflation to run above target for extended periods is hard to sell to politicians, so it will be interesting to see how Powell is likely to package the new policy framework.”

Rallying prices in many raw commodity markets just recently appear to be sensing that inflation, and maybe even problematic inflation, could be in store in the coming months, following the massive infusion of central bank liquidity into the global financial system in recent months, to stimulate economies crippled by Covid-19 lockdowns.

The important outside markets today see Nymex crude oil prices slightly down and trading around $43.30 a barrel. Hurricane Laura is lashing Texas and Louisiana and has shut in much of the U.S. Gulf coast oil and gas installations. That pushed gasoline futures prices to a five-month high this week. The U.S. dollar index is a bit weaker and not far above its recent two-year low. The yield on the U.S. Treasury 10-year note is trading around 0.68% today.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the revised estimate of second-quarter gross domestic product, pending home sales and the Kansas City Fed manufacturing survey.

Technically, the gold bulls still have the firm overall near-term technical advantage, amid a so-far normal downside price correction in a market that is still bullish. Prices are still in an uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at $2,000.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at this week’s high of $1,961.90 and then at $1,975.00. First support is seen at $1,925.00 and then at this week’s low of $1,901.40. Wyckoff’s Market Rating: 7.0

Live 24 hours silver chart [ Kitco Inc. ]

September silver futures bulls have the solid overall near-term technical advantage. A bullish symmetrical triangle pattern has formed on the daily bar chart. Prices are still in an overall price uptrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the August high of $29.915 an ounce. The next downside price objective for the bears is closing prices below solid support at the August low of $23.58. First resistance is seen at this week’s high of $27.665 and then at $28.00. Next support is seen at $27.00 and then at $26.500. Wyckoff’s Market Rating: 7.5.

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Ford deal to build electric cars in Oakville comes amid $500M government cash to upgrade plant – CBC.ca

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The federal government and Ontario have pledged to spend up to $500 million to make the Ford plant in Oakville, Ont., able to build electric vehicles.

The future of the plant has been a key question for Canada’s automotive industry ever since the Unifor union started negotiating with the automaker for a new three-year pact to cover the company’s Canadian workforce.

The two sides struck a deal a few hours after a midnight strike deadline on Tuesday morning, one that will see the company commit $1.98 billion to build five new electric vehicles and an engine contract that could yield new jobs in Windsor, Ont.

Ford has previously committed to spending $11 billion US to develop and manufacture electric vehicles, but so far all of that money was earmarked for Ford plants in Mexico and the company’s home state of Michigan.

“With Oakville gaining such a substantial portion of Ford’s planned investment, the assembly plant and its workers are better set for employment going forward,” said Sam Fiorani, vice-president of global forecasting at AutoForecast Solutions.

Currently, the plant builds the Ford Edge and Lincoln Nautilus, but concerns over the plant’s future emerged earlier this year when a report suggested Ford was contemplating scrapping the Edge altogether. The new vehicles will come as welcome news for the plant, even as Fiorani says he worries that demand for the electric vehicles (EV) has so far not lived up to the hype.

“The EV market is coming, and Ford looks to be preparing for it. However, the demand is just not growing in line with the proposed investment from all vehicle manufacturers,” he said.

Plant needs upgrade first

And the plant can’t simply flip a switch and start building an entirely new type of vehicle. It will require a major retooling, and that will require time — and cash — to happen, which is where government cash comes in.

As first reported by the Toronto Star, the two branches of government have committed to spent up to $500 million combined to upgrade the plant so that it can build electric vehicles.

“The retooling will begin in 2024 with vehicles rolling off the line in 2025,” Unifor president Jerry Dias said. “So we know this is a decades-long commitment.”

It’s not clear what portion of the cash will come from what branch of government, but CBC News has previously reported that Wednesday’s throne speech is expected to contain a number of policies aimed at beefing up Canada’s electric vehicle industry, both on the consumer side and for businesses that build them.

Ontario’s minister of economic development and trade welcomed the news of a tentative deal on Tuesday and confirmed that Queen’s Park legislators stand ready to do their part.

“Our government will always work with our federal colleagues, workers and the auto sector to ensure the right conditions are in place for the industry to remain stable today and seize the new opportunities of tomorrow,” a spokesperson for Vic Fedeli told CBC News in an emailed statement Tuesday.

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Canada nails down 5th deal for potential COVID-19 vaccine – CBC.ca

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Canada has now committed more than $1 billion to buy doses of COVID-19 vaccines after securing a fifth deal with Sanofi and GlaxoSmithKline Tuesday.

Procurement Minister Anita Anand said Tuesday that Canada has a deal in place to buy up to 72 million doses of their experimental vaccine candidate, which is just starting the second of three trial phases this month.

In all, Canada has committed $1 billion to buy at least 154 million doses of vaccines from five different companies, and most of that money will not be refunded even if the vaccines never get approved.

“We need to make a substantial investment in order to ensure that Canada is well positioned to secure access to the successful vaccine or vaccines,” Anand said in an interview with The Canadian Press.

‘Bet on multiple horses at the same time’

“The way in which we are doing that is to bet on multiple horses at the same time in order to ensure that as one or more of those horses crosses the finish line we have access to those vaccines,” she said. 

Canada has signed deals with Moderna, Pfizer, Novavax, Johnson & Johnson and now Sanofi and GlaxoSmithKline, all of which are among some of the most promising vaccines, but none of which have completed all the required clinical trials, or been approved for use in Canada.

On Sept. 3, Sanofi and GlaxoSmithKline said their vaccine candidate was going to begin Phase 1/2 trials, which will test it on 440 individuals. The hope is the vaccine will be ready for the third and final phase of trials by the end of the year, and approved for use in the first half of 2021.

Moderna has a vaccine in Phase 3 trials, and Pfizer’s is in a combined Phase 2 and 3 trial. Novavax is in a Phase 2 trial, while Johnson & Johnson is in a Phase 1/2 trial.

Public Services and Procurement Minister Anita Anand listens to a question during a news conference in Ottawa on April 16. Anand announced a new deal with Sanofi and GlaxoSmithKline Tuesday. (Adrian Wyld/The Canadian Press)

Most clinical trials have three phases to ensure the safety and effectiveness of the vaccine or drug being developed.

Each phase of a trial adds more volunteers on whom the drug is tested, looking for adverse health effects and whether the vaccine does cause a person to develop antibodies that can protect against COVID-19.

More anti-viral drug also secured

Anand said Canada has also signed an agreement with Gilead Sciences and McKesson Canada to get 150,000 vials of remdesivir, the only antiviral drug that has proven effective at treating patients with COVID-19. Health Canada approved the drug for use on COVID-19 patients at the end of July.

The doses will begin arriving at Canadian hospitals this month.

Canada has also joined the international vaccine co-operative known as the COVAX Facility, which is bringing together wealthy countries with low and middle-income countries to collectively invest in doses of vaccines.

It has not yet announced how much money it will contribute, a figure that was to have come last week but has been delayed. Now Anand says that Canada remains committed to COVAX and more details will be coming soon.

Canada has chosen to participate in both parts of the COVAX program. The first is for any country to join to get access to vaccines, and the second is a fund for wealthy countries to help low-income countries participate.

The Canadian Coalition for Global Health Research and the Canadian Society for International Health have both criticized Canada for acting to buy doses of vaccine for itself, hindering efforts to ensure vaccines that are successful are distributed fairly around the world.

GAVI, the Vaccine Alliance, said Monday that 64 wealthy countries had joined the COVAX Facility, including Canada. The United States has not joined.

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Stocks rise as technology rally tempers virus woes – BNN

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Stocks rose as dip buyers emerged after the market selloff, tempering concern over remarks from Federal Reserve officials that pointed to a slow economic recovery. The dollar climbed.

Most groups in the S&P 500 advanced, with retailers and real-estate companies leading gains. Tech giants drove the Nasdaq 100 to a back-to-back rally, while the Dow Jones Industrial Average underperformed. The benchmark gauge dropped earlier Tuesday as Fed Chairman Jerome Powell said the economy has a long way to go before fully recovering and will need further support. Meanwhile, Chicago Fed President Charles Evans noted that rates could rise before the inflation target is reached.

Equities are still heading toward their first monthly slide since March on concern Congress hasn’t agreed on another fiscal stimulus package, while an increase in global virus cases has raised the specter of more lockdowns. British Prime Minister Boris Johnson announced new restrictions that are likely to last six months and told people to work from home if possible, saying the country is at a “perilous turning point” for the virus.

Congressional Democrats and Republicans and the White House have opened negotiations to resolve a dispute over farm aid that had raised the risk of a U.S. government shutdown on Oct. 1. To facilitate the talks, the House may scrap plans to vote later Tuesday on a stopgap spending bill that lacked Republican and White House support.

“We think equities will move higher over the medium term, thanks to the likely development of a successful vaccine, an end to election uncertainty, the passage of new U.S. fiscal stimulus, and continued extraordinary global monetary support,” wrote Mark Haefele, chief investment officer of global wealth management at UBS Group AG. “However, the path to ‘more normal’ is likely to be bumpy,” he said, adding that “we therefore expect volatility to persist over the balance of the year.”

Financial and energy stocks, once dominant within the S&P 500, are taking even more of a back seat to technology shares than they did as a bull market ended 20 years ago.

The two industry groups together have trailed the weight of the S&P 500 Technology Index by as much as 17 percentage points this month, according to data compiled by Bloomberg. That’s less than a point away from a low in March 2000 — a figure that isn’t adjusted for a September 2018 index shift, which lifted the ratio by 5.1 points in just one day. Bespoke Investment Group LLC highlighted the comparison in a blog post Monday.

These are some of the main moves in markets:

Stocks

The S&P 500 climbed 0.7 per cent as of 2:55 p.m. New York time.
The Stoxx Europe 600 Index advanced 0.2 per cent.
The MSCI Asia Pacific Index dipped 0.9 per cent.

Currencies

The Bloomberg Dollar Spot Index climbed 0.5 per cent.
The euro dipped 0.5 per cent to US$1.1716.
The Japanese yen weakened 0.3 per cent to 104.93 per dollar.

Bonds

The yield on 10-year Treasuries decreased less than one basis point to 0.66 per cent.
Germany’s 10-year yield advanced three basis points to -0.51 per cent.
Britain’s 10-year yield gained five basis points to 0.203 per cent.

Commodities

West Texas Intermediate crude advanced 0.1 per cent to US$39.33 a barrel.
Gold depreciated 0.4 per cent to US$1,904.41 an ounce.
Silver depreciated 1.1 per cent to US$24.45 per ounce.

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