International spot gold (19 October) moderate stabilization, high hit $1918.21 an ounce or shrunk, after because of America’s fiscal stimulus bill, still have large variable global outbreak repeatedly intensified, and the United States before the election, unease, gold prices range-bound again last week, the precious metal is obvious catalyst is still waiting for the new direction, in order to usher in the new. Gold prices remain under pressure as the dollar continues to attract safe-haven buying amid a rising number of confirmed cases around the world.
Both parties in the United States have agreed to continue talks on a stimulus bill, with progress expected in the coming days. On Sunday, U.S. House Of Representatives Speaker Nancy Pelosi said she was hopeful an agreement could be reached before the November ELECTION, and said the next 48 hours would be key to reaching an agreement. At last check, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin will speak on the phone at 3 PM local time to discuss the economic stimulus plan.
Meanwhile, China reported third-quarter GDP growth of 4.9 per cent year on year, down from expectations of 5.2 per cent but up sharply from 3.2 per cent in the second quarter. China’s GDP contracted 6.8 per cent in the first quarter, making it the first major economy to return to growth.
In terms of geopolitical risks, the latest information released by the South China Sea Strategic Situational Awareness Program platform on Monday said that on October 19, one RC-135W reconnaissance aircraft (AE01CE) and one EP-3E reconnaissance aircraft (AE1D8A) of the US Air Force went to fujian and Guangdong to conduct reconnaissance in the near air, which was only about 50 nautical miles from the territorial sea baseline.
From a technical point of view, gold stability key support 1900 held the end of September since the rise of the channel, the short – term began to challenge the 1910-1913 resistance area, if it can break will usher in the further room to rise. On the downside, support is at $1,899, a break below which will detect one-month trendline support at $1,890, followed by last week’s low at $1883/82. If it continues down, it will face support of $1873/72 at the intersection of the October low and the 100-day moving average. A break below $1868 would be a sell signal for a downtrend to develop.
George Milling-Stanley, chief gold strategist at State Street Global Advisors, says investors should not pay too much attention to short-term market moves and should instead look at the bulls that have pushed gold prices to record highs in August.
There are huge problems in global markets, macro, economic and geopolitical, and gold can only go up. Just get through the recent period of profit-taking.
In addition, as of October 16, there were 2,099.515 tonnes of gold held in the world’s eight largest gold ETFs, down 3.503 tonnes from the previous trading day, according to data from gold information website www.24K99.com, which monitors the world’s eight major gold ETFs.
Invesco market strategist David Chao said global risk assets will be volatile in the short term as the U.S. election puts downward pressure on markets and a flight to safety. A diversified portfolio makes sense, especially one with safe-haven assets.
Adrian Zuercher, global head of asset allocation at UBS Group, said market risks associated with the U.S. election could not be ignored. So we continue to recommend holding gold.