【TOP1 Evening】Gold falls, Oil concern over Iraq oilfield attack, Pound drops as Brexit impasse unsettled

Gold 

Gold prices edged lower on Thursday, following a steep sell-off in the previous session, as a breakthrough in long-running U.S. fiscal stimulus negotiations remained elusive.

Spot gold fell 0.46% to $1831.79 per ounce by 18:00 (GMT+8).

Lawmakers in the United States extended federal government funding by a week to give them more time to agree on a coronavirus relief package. But U.S. Senate Majority Leader Mitch McConnell said they were still looking for a way forward.

Money has poured into Bitcoin funds and out of gold since October, a trend that's only going to continue in the long run as more institutional investors take a position in cryptocurrencies, according to theJPMorgan's quantitative strategists, including Nikolaos Panigirtzoglou.

The Grayscale Bitcoin Trust, listed security popular with institutions, has seen inflows of almost $2 billion since October, compared with outflows of $7 billion for exchange-traded funds backed by gold, according to JPMorgan.

"If this medium to longer-term thesis proves right, the price of gold would suffer from a structural flow headwind over the coming years," wrote JPMorgan's strategists.

In the short term though, there's a good chance that Bitcoin prices have overshot and gold is due for a recovery, the bank said. For Bitcoin, momentum signals have deteriorated, which will likely cause selling by investors that trade on price trends.

By 18:00 (GMT+8), silver fell 0.43% to $23.839 per ounce, bitcoin fell 1.13% to $18295.

On Wednesday, the United States passed another gruesome pandemic milestone, with states reporting over 3,000 coronavirus deaths in a day for the first time.

At the same time as Americans absorb (or ignore) the public-health crisis and its disastrous economic effects, the nation marches closer to the roll-out of the vaccine. On Thursday, the Food and Drug Administration will make its first decision about public approval for the Pfizer-BioNTech candidate. If given the green light, doses will most likely be distributed to medical workers and nursing home residents within 24 hours.

Forex

The U.S. dollar, which tends to fall when risk appetite is strong, held firm against other major currencies as an agreement on U.S. stimulus remains elusive as proposals and counterproposals on COVID-19 aid have flown around the U.S. Capitol.

The U.S. dollar index fell 0.21% to 90.93 by 18:00(GMT+8).

The GBP/USD was down 0.70% to 1.33028 by 18:00(GMT+8).

The European Commission and Britain remained "far apart" on the Brexit trade deal, the bloc's chief executive said after what she described as a "lively" dinner with the British Prime Minister.

Bank of England Governor Andrew Bailey has warned a no-deal Brexit would cause longer-term damage to Britain's economy than the COVID-19 pandemic, and the impact of the change might be felt for decades.

At 18:00(GMT+8), the EUR/USD rose 0.04% to 1.20860; the AUD/USD rose 0.43% to 0.74742; theUSD/JPY rose 0.28% to 104.531.

Also curbing appetite for the common currency, the European Central Bank is widely expected to expand its stimulus measures to prop up the recession-hit currency bloc at its policy meeting later on Thursday.

ECB President Christine Lagarde has made clear in recent weeks that a bigger Pandemic Emergency Purchase Programme (PEPP) and more subsidised long-term loans for banks will form the backbone of its policy measures.

Crude Oil

Oil prices rose in early trade on Thursday, buoyed by a Covid-19 vaccine rollout in Britain and the imminent approval of a vaccine in the United States, which could spur a rebound in fuel demand, despite a large build in U.S. crude stocks last week.

U.S. West Texas Intermediate (WTI) crude was at $45.948 barrel, rose 0.31%, Brent was up to $49.132 a barrel, rose 0.39% by 18:00 (GMT+8).

Vaccinations could start as soon as this weekend in the United States, with a panel of advisers to meet on Thursday to discuss whether to recommend to the Food and Drug Administration emergency use authorization of the Pfizer/BioNTech vaccine.

Canada approved its first Covid-19 vaccine on Wednesday and said inoculations would start next week.

Oil prices were also supported by some nervousness after two wells at a small oilfield in northern Iraq were set ablaze in what the government called a "terrorist attack," though production was not affected.

"While the wells were small, it has raised concerns of further disruptions," ANZ Research said in a note.

Analysts were surprised that the market had shrugged off an unexpectedly large build in U.S. crude stocks in government data released on Wednesday, largely due to a plunge in U.S. crude exports to their lowest since 2018.

Crude inventories rose by 15.2 million barrels in the week to Dec. 4, the Energy Information Administration said.

Stocks

Asia-Pacific stock fell on Thursday.

Nikkei 225 fell 61.70 points or 0.23%, close at 26,756.24.

S&P/ASX 200 fell 45.40 points or 0.67% to close at 6,683.10.

Hang Seng Index fell 92.25 or 0.35% to 26,410.59.

South Korea's Kospi fell 9.01 points or 0.33% to 2,746.46.

Taiwan capitalization-weighted stock index rose 140.65 points, or 0.98%, at 14,249.49. 

BlackRock has raised equities to overweight for 2021, based on its view that the restart of the economy will accelerate with the distribution of vaccines.

Mike Pyle, BlackRock's global chief investment strategist said BlackRock has cut investment grade credit to underweight, on a tactical basis, and prefers high yield debt for income potential. The firm also upgraded emerging market debt to neutral and Asian fixed income to overweight.

"We see 2021 as a really powerful year for the restart, in terms of economic activity, but also importantly a year where we're going to see central banks hold interest rates within a pretty tight range," Pyle said.

Pyle said the firm remains focused on the stocks of quality companies, particularly in the U.S. The firm's strategists favor companies that will perform even if fiscal support is disappointing, and they favor some cyclical exposures. Sectors that surprised to the upside were housing, autos and materials.

Tech also remains attractive and is expected to maintain its high profit margins in a low interest rate environment. Tax increases had been considered a looming risk for tech, but the fact a divided Congress was elected in November has made that less likely.

Trends such as cloud computing, online advertising and digital payments provide growth opportunities, and sectors within tech like semiconductors and software could show leadership.

In addition to U.S. stocks, BlackRock also overweights emerging markets and most Asian equities. It has underweighted Japanese and European equities.

Focus Tonight

20:45(GMT+8): ECB Interest Rate Decision, Forecast:0%, Previous: 0%;

21:30(GMT+8): United States Continuing Jobless Claims (28/NOV), Forecast: 5335K, Previous: 5520K;

21:30(GMT+8): ECB Press Conference;