Asian market on Tuesday (May 19) morning, the international spot gold from the low rebounded slightly, the day is now up 0.15 percent. In the previous session, gold surged to a more than seven-year high of $1,765.10 an ounce. However, short sellers retaliated and gold retreated sharply from its high, diving about $38 from the day’s high to close the day at $1,731.72, down $9.66 or 0.55%.
The dollar index fell sharply on Monday, extending its decline to a low of 99.56 on the day. At the same time, spot gold has also plunged from the platform. Separately, U.S. stocks and crude oil rose hand in hand, with the s&p 500 closing at a 10-week high and crude oil at its highest close since March 11. In the previous session, the dollar and gold both took a dive, while U.S. crude oil surged on optimism surrounding a novel coronavirus vaccine trial.
COMEX June gold futures, meanwhile, were down about 1.3 percent at $1,734.40 an ounce. And holdings in the SPDR Gold Trust, the world’s largest Gold exchange-traded fund, rose to their highest level in more than seven years, reflecting investors’ continued risk aversion.
Michael Matousek, chief trader at U.S. Global Investors, said: “the reason why gold is now swinging between positive and negative is that everyone is thinking about taking a ‘risk’ on equities because the market as a whole is up 3%. However, the trend is still up and there are still good reasons to buy gold.”
Moderna announced positive progress in early human trials
Moderna’s stock jumped on Monday after the company announced that a closely watched human trial of a novel coronavirus vaccine produced novel coronavirus antibodies in 45 participants.
Each participant received a dose of 25, 100 or 250 micrograms, and there were 15 people in each dose group. The participants were given two vaccines through their upper arm muscles about 28 days apart.
On day 43, two weeks after the second injection, binding antibody levels in the 25-microgram group were the same as those normally seen in blood samples from people recovering from the disease, the Cambridge, mass.-based company said. Those who had 100 micrograms had “significantly higher” levels of antibodies than those who had recovered. The company said it did not have data on the trial group that received 250 micrograms.
The vaccine also produced neutralizing antibodies against novel coronavirus in at least eight participants, the company said. Experts say neutralizing antibodies appear to be important in gaining protection.
Four participants were given a dose of 25 micrograms, while the other four received a dose of 100 micrograms. The company said the levels of the neutralizing antibodies were equal to or higher than those found in blood samples. Moderna said there is no data on antibody neutralization for other participants.
The scientists hope that the antibodies will protect against novel coronavirus to some extent, but they cannot say for sure because the antibodies have not been studied and some patients seem to have recovered from the virus and have been reinfected.
U.S. officials say it could take as long as 12 to 18 months to produce a vaccine against novel coronavirus.
According to the world health organization (WHO), more than 100 vaccines are being developed worldwide. At least eight vaccines are already in human trials.
Moderna has been working with the national institutes of health to rapidly develop a vaccine. The company is the first to release data on human trials of a coronavirus vaccine. The company said it expects to begin phase iii trials in July.
The news sparked optimism, with U.S. crude oil surging and safe-haven assets such as the dollar and gold selling off.
The global economy is unlikely to fully recover by 2021, international monetary fund chief Elena georgieva has warned
The global economy will take much longer to fully recover from the novel coronavirus outbreak than initially expected, international monetary fund chief Kristalina Georgieva said on Monday, highlighting the dangers of protectionism.
Ms georgieva said the IMF could revise down its forecast of a 3 per cent contraction in GDP in 2020, but gave no details. It could also trigger a change in the IMF’s forecast for a partial recovery of 5.8 per cent growth in 2021.
Georgieva said the figures from around the world were worse than expected. “Obviously, this means it will take longer for us to fully recover from this crisis,” georgieva said in an interview. She didn’t give a specific timeline for recovery.
At the same time, ms georgieva said the group was concerned about risks such as high debt levels during the recovery, rising deficits, unemployment, bankruptcies, rising poverty and inequality. But she says the crisis has also given a boost to the digital economy, providing opportunities for greater transparency and online learning, and even for small companies to enter the market.
Although gold prices retreated in the last session, but overall, gold’s safe-haven status is still unshakable. Gold as a whole remained the haven of choice in the latest week, weighed down by pandemic fears and expectations of negative interest rates in major economies. Industry insiders said that due to the continued uncertainty, late investment demand for gold may continue to be strong.
Gold is undoubtedly one of the eye-catching investment products this year, statistics show that the international gold price has risen by 15% this year. Gold continued to perform strongly in the latest week as fears about the impact of the outbreak and hedging policies in major economies made negative interest rates possible.
So far, spot gold has hit a new high of $1,765.10 an ounce since October 2012, while silver has risen to a new more than two-month high of $17.56 an ounce.
All attention for the rest of the session will be focused on federal reserve chairman colin Powell’s testimony, federal open market committee minutes, initial jobless claims and the Philadelphia FED’s manufacturing index.
At 22:00 Beijing time, federal reserve chairman colin Powell and U.S. Treasury secretary Steven mnuchin appeared at the hearing. In his speech last week, Mr. Powell called on congress and the administration to take further action. Analysts said the two sides on the future of the stimulus policy will attract investors. While the U.S. Treasury is reluctant to take more pressure, the fed may have to come up with more new options if it is unwilling to accept negative interest rates.
If Powell or mnuchin send new stimulus signals, the dollar could sell off even more and gold could rebound sharply.
On Monday, fed chairman colin Powell reiterated the central bank’s commitment to ensuring that markets function properly and provide capital to those in need during the coronavirus crisis.
In his prepared remarks to the senate banking, housing and urban affairs committee, Powell outlined the fed’s myriad plans during the novel coronavirus pandemic.
“The federal reserve’s response to this special period has been follow our was awarded to promote the mission of the American full employment and price stability, as well as our responsibility to improve the financial system stability,” the statement said, “we are committed to using our tools to support this challenging period of economy, even if we realize that these measures only a part of the response of the wider public sector.”
‘the scope and speed of the economic downturn is unprecedented,’ Mr. Powell said. We should do all we can to alleviate the plight of suffering, and we should take all measures to alleviate it; The fed will use all its tools to help the economy; The fed will keep interest rates near zero until the economy gets back on track.
Since social isolation was introduced to contain the coronavirus, the federal reserve, congress and the Treasury have come up with various programs to keep the economy afloat.
At the fed, most of those loans came in the form of loan facilities for individuals, businesses, and local and state governments. The fed has also cut its benchmark interest rate to near zero and is buying government bonds in various forms to keep markets and the financial system functioning.
“The federal reserve has been given an important mandate, and over the past few months we have taken unprecedented steps at a very rapid pace,” he said.
Golden aftermarket outlook
After a period of stagnation, investor interest in gold should pick up and prices should return to levels above $2,000 an ounce, according to td securities (TDS).
Commerzbank analyst Carsten Fritsch said it would not be easy for gold to hit a new record, with many still betting on the entry of funds in gold etfs.
Broker HYCM believes gold tends to confirm continued bullishness, based on bets that the central bank will cut interest rates further. Gold, on the other hand, is in positive territory because the economy is facing the risk of recession. The third is the devaluation of the currency. Massive quantitative easing has devalued the gold fiat currency, and the gold price is expected to rise further.
“Gold prices were buoyed by dovish comments from the federal reserve and concerns about equities,” Carlo Alberto De Casa, chief economist at ActivTrades, said in a note. It is clear that investors are continuing to buy gold as insurance against any further correction in equities.”
Gavin Wendt, senior energy analyst at MineLife Pty, said, “the economic recovery is likely to be more problematic than optimists think, and it will be confirmed that gold could benefit from a broad monetary stimulus.”
Zhang juntao, a research analyst at industrial bank, believes that the rebound in commodity prices represented by crude oil and the relatively stable U.S. Treasury yields have led to a decline in real yields, which is positive for gold. At this point, gold has a strong “commodity property” or “anti-inflation property.”
Bmo’s gold outlook shows physical demand and central bank purchases are weak, yet there is little reason to sell gold, citing unprecedented fiscal and monetary support and a renewed deterioration in international trade.