In the Asian session on Thursday, spot gold continued to hover below the 1900 level, while silver extended its losses to 1%. Gold bulls took a hit after U.S. Treasury Secretary Steven Mnuchin said a comprehensive bailout package would not be reached before the election, and a short-term plunge to the 1900 level gave some support to renewed tensions between China and the United States.
Gold rebounded slightly yesterday to close just above 1900 as the dollar weakened and uncertainty over the US election and global economic recovery boosted the safe-haven metal’s appeal.
However, gold’s rally was subdued after the U.S. Treasury secretary admitted it would be difficult to reach an agreement on a stimulus package before the election, and the Asian session slipped past 1900 on Thursday.
Mnuchin spoke with House Speaker Nancy Pelosi during a discussion after another hour-long phone call on Wednesday morning, saying the two parties remain divided in negotiations over a new bailout package and have yet to agree on a cap on funding.
“Right now, just given where we are and where we disagree on the details, reaching an agreement before the election and putting it into practice will be difficult, but we will continue to work to resolve these issues,” Mr. Mnuchin said at a conference sponsored by the Milken Institute. “
Mr Mnuchin stressed that ms Pelosi would have to agree to concessions to reach a deal on a new bailout. He added that if the two sides cannot reach an agreement before the November presidential election, he hopes Trump can win re-election and try to reach an agreement as soon as possible.
Mr Mnuchin and Ms Pelosi are due to speak again by phone on Thursday in a last-ditch effort to reach an agreement on a new bailout package before the election.
Pelosi’s spokesman Drew Hammil said on social media that Pelosi and Mnuchin had a “constructive dialogue” on the wording of the bailout and what happened over the weekend, and that the two sides remained in disagreement on major issues, particularly the national virus testing program.
“Whoever wins the election, Democrat or Republican, we’re going to see stimulus,” said Bart Melek, head of commodity strategy at TD Securities in New York. “The truth is that the U.S. needs a stimulus, although it seems doubtful that any meaningful stimulus will be available before the election.”
While gold has been hit by dim hopes of stimulus, renewed tensions between China and the U.S. have provided some support.
The U.S. State Department has recommended to President Donald Trump’s administration that Ant group be placed on a trade blacklist, warning U.S. investors not to participate in its ipo, Reuters reported.
Separately, the Trump administration on Wednesday named a senior U.S. human rights official as its special coordinator for Tibet. The move is likely to anger China at a time of growing tensions between Washington and Beijing.
Separately, Taiwan’s defense ministry said a U.S. destroyer sailed north yesterday after passing through the Taiwan Strait from south to north. In response, senior Colonel Zhang Chunhui, spokesman for the PLA Eastern Theater Command, made a statement on the uss Barry sailing across the Taiwan Strait.
Senior Colonel Zhang Chunhui said that on October 14, the US destroyer “Barry” sailed across the Taiwan Strait, and the PLA Eastern Theater Command organized naval and air forces to track and monitor the US ship throughout the whole process. Recently, the US has repeatedly sent wrong signals to the “Taiwan independence” forces on Taiwan-related issues, seriously undermining peace and stability in the Taiwan Straits. We warn the US to stop its words and deeds in the Taiwan Strait. The troops in the THEATER are on high alert at all times, resolutely safeguarding China’s sovereignty and territorial integrity and maintaining peace and stability across the Taiwan Straits.
On the daily chart, the DOLLAR index.DXY, which fell slightly yesterday, remained in a narrow, volatile trading range and was trading around 93.40. The daily chart MACD green momentum column gradually contracted, KDJ random index rebounded from the oversold level, indicating that short-term bearish momentum weakened, there is still room for a rebound.
On the 4-hour chart, the DOLLAR index hovered near its 100-period moving average, watching to see if it could break through the 93.50 level. The MACD red momentum column weakened slightly, and the KDJ random index dipped below the 50 level, indicating a slowdown in bullish momentum for the DOLLAR, short term or further volatility.
On daily charts, gold narrowly closed above the 1900 level yesterday before losing ground to this level under intraday pressure. The daily chart MACD red column was weak, with the KDJ random index hitting a low of 50, indicating that bullish momentum for gold is weak and there is room for downside.
On the four-hour chart, gold’s rally stopped near 1910 and is now testing its 100-session average to support $1,893. The MACD green momentum column was basically stable, while the KDJ random index rebounded from the oversold level, indicating that gold bearish momentum remains and is expected to stabilize in the short term.
On daily charts, silver continued to trade in a narrow range after its flat close yesterday, barely hovering around $24.10. The daily MACD red column is very weak, with the KDJ stochastic moving below the 50 level, indicating a lack of bullish momentum for silver or further weakness.
On the 4-hour chart, silver’s rally stopped at the 20-period moving average, and now further falls to test the 100-period moving average support. The MACD green momentum column was basically stable, while the KDJ random index held above the oversold level, indicating that silver bearish momentum is stable, short term or further volatility downward.
Fundamentals positive factors:
- The situation across the Taiwan Straits is once again tense. Taiwan’s defense ministry said a U.S. destroyer sailed north yesterday after passing through the Taiwan Strait from south to north. This is the 10th time this year that an American warship has sailed through the Taiwan Strait. Today, the PLA Eastern Theater Command responded to the US warship crossing the Taiwan Strait by warning the US to stop its words and deeds in the Taiwan Strait.
- The STATE Department of the United States suggested the production of ant group. The U.S. State Department has recommended to President Donald Trump’s administration that Ant group be placed on a trade blacklist, warning U.S. investors not to participate in its ipo, Reuters reported.
- The Trump administration named a senior U.S. human rights official on Wednesday as its special coordinator for Tibet amid growing tensions between Washington and Beijing.
- Lilly Pharmaceuticals Inc. said Oct. 13 it is suspending a trial of a novel Coronavirus combination antibody therapy for safety reasons, CNN reported.
Fundamentals negative factors:
1.The US Treasury Secretary has admitted it will be difficult to reach an agreement on a stimulus package before the election. Mr Mnuchin said there were still differences in the negotiations over a new rescue package between the two parties and there was still no agreement on the amount of money to be spent. The scale of the stimulus has delayed the launch of negative gold.
- Us House Speaker Nancy Pelosi says President Trump’s latest coronavirus stimulus plan fails to meet us needs. The scale of the stimulus has delayed the launch of negative gold.
- The IMF said its global economic forecasts were “less dire” as the recovery in rich countries and China was faster than expected. A faster-than-expected economic recovery could reduce stimulus measures around the world, bearish for gold.