Spot gold came under short-term pressure as the DOLLAR index edged higher in Asian trading on Monday, with gold currently trading around $1,925 an ounce after closing in on $1,920. On Friday, gold surged more than $35 as investors looked forward to a new round of stimulus before the U.S. election. But the bulls were hit over the weekend by news of opposition to Mr Trump’s $1,800bn stimulus package. More than the situation in China and India, according to Indian media reported the latest, China and India will be held on Monday in the seventh round of forces commander level talks, it concerns that the talks could further easing tensions on both sides, in addition, the news that China and India is considering a reduction of the number of tanks along the ShiKongXian agreement.
Gold surged more than $35 on Friday as uncertainty over the U.S. presidential election and bets that new stimulus measures will push inflation higher offset investors’ improved appetite for riskier assets.
US President Donald Trump said on Twitter on Friday: “Coronavirus relief negotiations are ongoing. A big one!” Meanwhile, there are reports that the White House will increase stimulus funding for coronavirus to $1.8 trillion.
However, the latest developments over the weekend have poured cold water on gold bulls. The proposal has been rejected by both parties. As a result, spot gold came under pressure as low as $1, 921.30 an ounce on Monday.
Hopes of a novel Coronavirus rescue deal before the Nov. 3 election are fading after a $1.8 trillion new economic stimulus plan proposed by the Trump administration drew criticism Saturday from Democrats and Republicans in Congress.
House Speaker Nancy Pelosi said on Saturday that a $1.8tn economic stimulus plan proposed by the Trump administration was “one step forward, two steps back” and would need to be revised to gain support from Congressional Democrats.
In a weekly letter to her Democratic colleagues, Pelosi said the administration’s proposal lacked a strategic plan to contain the spread of the virus. “At this point, we remain divided on many priorities, and Democrats are waiting for the administration’s wording on several provisions, while negotiations on appropriations totals continue,” she said in the letter.
Pelosi called White House spending on virus testing, tracking and treatment “completely inadequate,” and said Democrats and Republicans remain deadlocked on the stimulus bill until those issues are resolved.
In a conference call Saturday morning local time with Treasury Secretary Steven Mnuchin and White House Chief of Staff Kenneth Meadows, a number of Republican senators criticized the cost of the trump administration’s proposal, according to people familiar with the matter.
Senate Majority Leader Mitch McConnell, the Top Republican in Congress, said Friday he doubted lawmakers would pass a package by November 3.
Gold is close to our long awaited target of $1,934.86 an ounce, and we need to watch how it performs when it hits that level, according to Economies.com. If gold fails to break above that level, it will push prices down again, first testing $1901.80 an ounce and then trying again to resume the bearish trend.
On the other hand, once gold crosses $1,934.86 an ounce, that will push prices higher, with short-term targets at $1967.90, According to Economies.com.
According to Kitco News’ latest Golden Week survey, released on Friday, market analysts and retail investors believe gold is likely to move higher this week. Last week, 17 professional analysts responded to the survey. A total of 13 analysts, 76%, expect gold to rise; One analyst (6%) expects gold to slip this week; Three analysts (18%) said they think prices will move sideways.
Darin Newsom, President of Darin Newsom Analysis, said: “We see some short-term upside potential in the larger downtrend. We still need to see if this momentum can be sustained.”
“I would expect gold to move higher this week, but it’s really just in the broader trading range,” said Colin Cieszynski, chief market strategist at SIA Wealth Management. Cieszynski added that gold would need more stimulus spending to reach all-time highs.
“It doesn’t appear that the central bank is ready to inject more stimulus into the market and I don’t think the government will do anything until after the election,” he said.
Eureka Mining report editor Richard Baker said he expected gold prices to edge higher this week, but he also warned that volatility would remain high. “Gold will undoubtedly experience volatility as the Congressional stimulus plan seeks a balance between domestic novel Coronavirus and the reality of the presidential election,” he said.
The two countries are considering an agreement to reduce the number of tanks along the Line of Actual Control (LAC)
The seventh round of talks between Chinese and Indian military chiefs will be held in Chushul on October 12 amid the confrontation on the Line of Actual Control (LAC), WION News Network of India reported on Monday.
Chinese and Indian commanders have been holding talks at the military chiefs’ level since the June 15 clash in the Galwan Valley. Twenty Indian soldiers were killed in that clash, although the PLA also lost soldiers, the Chinese foreign ministry declined to give a specific number.
Separately, According to TimesNowNews, an Indian news outlet, China and India are considering a deal to reduce the number of tanks along the LAC. On October 12, Lt. Gen. Harinder Singh, commander of India’s 14th Army, and Maj. Gen. Liu Lin, commander of the Southern Xinjiang Military Command, will discuss the issue. On the Indian side, Lt. Gen. PGK Menon and Naveen Srivastava, joint Secretary of the East Asia Division of the Indian Ministry of Foreign Affairs, will also attend the Meeting on Oct. 12.
According to TimesNowNews, China has amassed 300-400 tanks along the LAC. They are located in different places, including Depsang, and in the area between Spanggur Tso and Rechin La. These tanks are mainly the ZTZ-99 main battle tank, one of the front-line tanks owned by the People’s Liberation Army. There are a small number of ZTZ-88 tanks in the Zchinla area. A large concentration of tanks in the Mandongo area is the ZBD-04A infantry Fighting vehicle.
As winter approaches, the Chinese worry that their tanks will be exposed. When the temperature drops to minus 40 degrees Celsius, these tanks are very difficult to operate.
TimesNowNews pointed out that reducing the number of armored vehicles traveling along the LAC could be a major attempt to reduce the likelihood of upgrades. Sources said the “drawdown,” especially of visible weaponry such as tanks, could be at least a positive result of negotiations that have been going on for months.
China and India held a sixth round of talks on the border impasse on September 21, but the talks remained inconclusive as Indian negotiators insisted that a full withdrawal from all flashpoints and a return to the status quo was the only way to ease tensions. Beijing had asked New Delhi to withdraw its troops from the strategic plateau on the south bank of Lake Bangong to reduce friction.
During the sixth round of the China-India ministerial negotiation, the Indian delegation was led by Lieutenant General Harinder Singh, commander of the 14th Indian Army. The participants included two major generals, four brigadier generals and other school-level officers and translators. The Indian side also had a new representative in the talks, Lieutenant General Manohar Menon of the Indian Army.
The Hindustan Times reported that Menon would soon succeed Singh as commander of the 14th Army when he completes his term next month. Mr. Singh has been leading military talks with China to ease border tensions.
Lieutenant-general Menon’s most prominent profile is that he was “the first head of India’s first mountain Division”, having served as army captain for the eastern section of the China-India border. It is worth noting that General Menon has been an advocate of a tough approach to China.
Indian media speculated that the military’s decision to replace 14th Army Chief Lieutenant General Harind Singh with a military hardliner, Lieutenant General Menon, may mean more tension in Ladakh in the future.
India and China have been locked in a standoff in Ladakh since May, with no signs of disengagement in the region.
September 30, China’s foreign ministry said in a statement, the two sides have sino-indian border region ShiKongXian frank and in-depth exchange of views agree to earnestly implement the 5 points consensus reached at the two foreign ministers meeting in Moscow, strictly abide by the agreement of border affairs and agreement, the two countries to take practical measures to promote the border situation further temper cooling, avoid taking any action that could complicate the situation.
The Chinese Foreign Ministry statement points out that the two sides made positive comments on the results of the 6th round of military-ministerial talks and agreed to continue to maintain dialogue and consultation through diplomatic and military channels, hold the 7th round of military-ministerial talks at an early date, promptly and properly handle the remaining issues on the ground and jointly safeguard peace and tranquility in the border areas.
On September 21, the Chinese and Indian militaries held the sixth round of military chiefs’ talks at the station where they met on the Moldo border and reached an important consensus: they agreed to stop adding troops to the frontline. China and India agreed to strengthen communication on the ground, to avoid further misunderstanding and miscalculation, to stop sending more troops to the front line, to refrain from unilaterally changing the situation on the ground and taking any action that might complicate the situation.
The Economic Times reported that the decision by the Chinese and Indian militaries not to increase the deployment of troops along the border in recent talks was welcomed, but that The Indian side had reservations given the incidents of trust violations by The Chinese side. “We will not blindly believe this,” the Indian official said. “While this agreement is a good start, we are prepared and the words have to match the actions.”