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Biden-Xi Meeting Kicks off the Week, Elon Musk Tweets Send Tesla Stock Down Again & BoE ‘Uneasy’ About Inflation

Gold prices reach highest level since June, as Biden-Xi meet

Gold prices climbed to their highest level since June, as markets anticipated Monday’s virtual summit between the world’s two largest economies.

The leaders of China and the United States will hold a virtual summit Monday evening, with issues such as the current disruption within the global supply chain on the agenda.

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XAUUSD hit an intraday high of $1,870, which is its highest level since June 13th, where prices were trading north of $1,874.

Regarding the summit, a senior member of the Biden Administration stated that, “We want to make clear our intentions and our priorities to avoid misunderstandings. The president will also make clear that we want to build common sense guardrails to avoid miscalculation or misunderstanding. That’s how you sustain responsible competition”.

The benchmark S&P 500 was also lower on Monday, as markets remained cautious prior to the summit.

Tesla shares fall, as Musk threatens to sell more stock

Shares in Tesla were lower to start the week and sees the company now in the midst of three consecutive bearish sessions.

Monday’s decline came as tweets from Founder, and CEO Elon Musk suggested that he could be set to sell even more shares of the company.

💡 More on the ‘Musk Effect’
This isn’t the first time we’ve covered the ‘Musk’ effect on Twitter. The business magnate has had a big impact on companies’ shares, not just his own.

This came after Musk had replied to U.S. Senator Bernie Sanders who tweeted that, “We must demand that the extremely wealthy pay their fair share. Period”.

To which Musk replied, “I keep forgetting that you’re still alive”, and went on to add that, “Want me to sell more stock, Bernie? Just say the word”.

$TSLA was down by as much as 5% in the session, trading at intraday low of $985.18, its lowest since October 25th.

FTSE 100 higher, even as BOE “uneasy” about inflation

London’s FTSE 100 closed marginally higher on Monday, as traders became nervy in the aftermath of comments from Andrew Bailey.

Speaking about the national inflation rate, the Governor of the Bank of England stated that, “I’m very uneasy about the inflation situation”.

Bailey went on to add that. “I want to be very clear on that. It is not of course where we wanted to be, to have inflation above target”.

💡 The current standing
The Bank currently expects inflation to peak at 5% next spring, well above the 2% target set by the government for the Bank to achieve, but Bailey said he had held back from voting for a rise in borrowing costs this month because he wanted more evidence on the post-furlough jobs market.

Despite this, the BOE voted to keep interest rates unchanged earlier this month, after many had expected them to hike, in response to rising consumer prices.

Regarding this he said, “On the decision itself, however, it was a very close call in my view”.

“Time is your friend; impulse is your enemy.”

– John Bogle

Eliman Dambell

Senior Market Analyst

 

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