Epidemic fear to force rate cuts “storm”! Gold and silver T+D both tumbled! Bulls coming back soon?

In early Asian trading on Monday, gold jumped sharply above the $1,590 barrier at the start of the day but retreated sharply to a low of $1,575.36 an ounce. But overall, gold has staged a choppy rebound, regaining the $1,600 mark earlier in the day. The rapid spread of the new pneumonia outbreak overseas has stoked fears that gold could regain a safe-haven bid after Friday’s plunge amid a global outbreak of the disease. Spot silver, meanwhile, has continued to rally from the previous session’s low of $16.374 an ounce.

Shanghai gold exchange gold T+D is down 2.30 percent to 357.00 yuan/g after intraday trading in Asia. This trading day opened at 365.30 yuan/gram and closed at 365.40 yuan/gram. Meanwhile, silver T+D is down 1.62 percent at rmb4,057 per kg, after opening at rmb4,121 and closing at rmb4,124.

On Friday, Shanghai gold exchange gold T+D closed down 5.52 yuan, or 1.49 percent, at 365.40 yuan per gram, with a high of 373.65 yuan per gram and a low of 365.28 yuan per gram. Meanwhile, silver T+D closed down 216 yuan, or 4.98 percent, at 4,124.00 yuan/kg, with the highest bid at 4,356 yuan/kg and the lowest at 4,084 yuan/kg.

In the previous session, international spot gold traded at 1,644.53 yuan per ounce, hitting a low of $1,562.80 and rising as high as $1,669.30 to close at $1,589.90, down $58.70, or 3.57%. International spot silver, meanwhile, opened at $17.76 an ounce on Friday, dipping as low as $16.35 and rising as high as $17.86 to close at $16.66, down $1.09, or 6.14 percent.

On March 2, the national health and fitness commission reported 202 new confirmed cases, 42 new deaths and 141 new suspected cases in 31 provinces (autonomous regions and municipalities directly under the central government) and the xinjiang production and construction corps from 0:00 to 24:00 on March 1.

On the same day, 2,837 new cases were cured and discharged from hospital, 8,154 close contacts were released from medical observation, and 255 cases of severe illness were reduced.

With global economic activity weighed down by the spread of the outbreak, investors are focusing on whether major central Banks are embarking on another massive easing cycle, especially the possibility that a sharp drop in U.S. stocks will force the federal reserve to cut interest rates.

The latest CME fed watch tool shows that the odds of the fed cutting rates by 50 basis points at its March 18 meeting have soared to 100%.

Richard Baker, the editor of Eureka Miner’s Report, said: “profit-taking, forced long liquidation, and subdued consumer demand in China likely contributed to gold’s decline last week. But he expects gold to be looking for a comeback. Given the growing uncertainty about the impact of the new coronavirus on the us economy and the world, gold is expected to recover to the $1,650 level next. In the next few weeks, gold will move back up to $1,800 an ounce.”

Adrian Day, chairman and chief executive of Adrian Day asset management, also said he expected gold prices to rise because “gold should do well in times of market uncertainty.”

Technical analysis

gold

The daily chart shows the gold price shows a trend of volatility retracement, fell below the 20 daily average. The MACD green momentum column appeared and expanded, but the KDJ random continued to move lower, indicating a further correction from the high.

On the 4-hour chart, gold rebounded from low volatility, the MACD green momentum column narrowed slightly, and the KDJ random index turned higher, indicating that gold’s short-term rebound momentum has restarted and may rebound slightly from low.

silver

The daily chart shows silver also maintaining a choppy pullback, with the MACD green energy column expanding, but the KDJ stochastic index further weakening, indicating that silver may retreat further from its high.

On the 4-hour chart, silver has rebounded somewhat from its lows, with the MACD green momentum column narrowing and the KDJ random index turning higher, indicating that silver’s short-term rebound momentum has restarted and is expected to continue to rebound away from the lows.

Fundamentals favorable factors:

1, March 2, national WeiJianWei bulletin: as of March 1, 24, according to the 31 provinces (autonomous regions and municipalities directly under the central government) and the xinjiang production and construction corps, the existing 32652 cases of confirmed cases of 7110 patients with severe cases (), the cumulative cured cases, 44462 cases of hospital, the cumulative death cases, 2912 cases, has reported 80026 cases of confirmed cases, the existing 715 cases suspected cases. A total of 663,240 close contacts were traced, and 46,219 close contacts were still under medical observation.

2.The headquarters of the central government of the Republic of Korea on Tuesday announced that 476 new cases of coronavirus had been confirmed in South Korea, bringing the total number of confirmed cases to 4212. South Korea confirmed more than 4,000 new cases of coronary pneumonia on Tuesday after more than 3,000 cases were confirmed on April 29.

3. On March 1, local time, who released the latest daily report on new cases of coronary pneumonia. As of 17:00 Beijing time on March 1, a total of 7169 cases and 104 deaths were confirmed in 58 countries outside China. Compared with the previous day’s report, there were 1,160 new cases of coronary pneumonia outside China, and five new cases were reported in five countries (azerbaijan, Ecuador, Ireland, Monaco and Qatar).

4. As of 1:00 Beijing time on March 2, a total of 1,694 new cases of coronary pneumonia were confirmed in Italy, an increase of 566 cases over the previous day. Of these, 34 died and 83 were cured.

Fundamental negative factors:

  1. The University of Michigan’s consumer confidence index rose to 101 in February, almost matching the expansion peak of 101.4 set in March 2018, according to a report released by the University of Michigan on Friday.

2. The Chicago purchasing managers’ index (PMI) rose 6.1 points to 49.0 in February, the highest level since August 2019, according to a report released on Friday.

3. The monthly index of pending home sales hit its second-highest level in nearly two years in January, data showed on Thursday, as low mortgage rates boosted sales of previously owned homes. The monthly index of existing U.S. home sales rose 5.2 percent in January from an expected 2.2 percent, after falling 4.9 percent.

4. Sales of new homes jumped 7.9 percent in January to an annual rate of 764,000, the highest since July 2007, the Commerce Department said on Wednesday. New U.S. home sales surged to a 12.5-year high in January, a sign of strength in the housing market that could help blunt the impact of the coronavirus on the economy and keep the longest expansion in history on the track.

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