In the Asian session on Thursday, spot gold was clearly in a downward trend, with short-term losses continuing to hit the 1910 mark, giving up most of the previous day’s gains, while silver extended its losses to 1 per cent.
Asian stocks are falling, and U.S. futures markets are weakening. The weakness in equities is helping the dollar, which in turn has pushed gold lower.
Fundamentally, the market is worried about the US stimulus deal. News reports that Russia and Iran are interfering in the US election also made traders nervous.
From the strongest to the weakest, the dollar led all major currencies in gains. The Australian dollar is the weakest of the risk averse flows.
In terms of gold’s hourly chart, the price of gold has been falling as the dollar has risen in early Asian trading. The move erased some of yesterday’s gains, which stopped at $1,931.38. That’s just shy of the October high of $1,933.28 set on Oct. 12. Gold failed to break above that level, sending prices back into downward territory.
Gold’s early losses widened to $1911.27 in today’s trading, which led the metal to consider testing the possibility of $1911.27. The technical key is $1,909.50 for the 100 and 200 moving averages. That level — despite a gap of $5 to $7 — is a prime target for bulls and bears. If prices can stay above that level, buyers have more control. If prices fall below this level, the bias shifts to a downward trend.
Us Stimulus plan: House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin made further progress on Wednesday on a stimulus plan to deal with the impact of the coVID-19 outbreak, her office said.
“Today’s conversation brings us closer to putting legislation on paper,” Pelosi’s spokesman Drew Hammill tweeted Wednesday after a 48-minute call. “By exchanging legislative language, we are better prepared to reach compromise on several priorities.”
Hammill said the two negotiators will meet again on Thursday. As the time frame became more pressing, both sides on Wednesday raised the possibility of a final vote after election day. White House economic adviser Larry Kudlow says announcing a deal between the administration and the House of Representatives in the next two weeks will continue to benefit the economy and markets.
Us election: Russia and Iran are trying to interfere in the 2020 US presidential election, Director of National Intelligence John Ratcliffe said On Wednesday.
“We have confirmed that Iran and Russia have obtained some voter registration information, respectively,” Mr Ratcliffe said at a news conference on Wednesday evening. “Such data can be used by foreign parties to convey misinformation.”
He urged Americans not to “let these actions have the desired effect.”
On the daily chart, the DOLLAR index.DXY was trading around 92.80 as it tried to stabilize after four straight days of losses. The daily chart MACD green momentum column gradually expanded, and the KDJ stochastic indicator approached the oversold level, indicating that short-term bearish momentum strengthened, and there was still room for prices to move lower.
In the 4-hour chart, the DOLLAR index.DXY rebounded from a low of 92.47 to see if that level would be a short-term support. The MACD green momentum column gradually weakened, and the KDJ random index rebounded from the oversold level, indicating the dollar bearish momentum weakened, and the short term may further correction rebound.
On the daily chart, gold intraday from the high fell, once hit the 1910 barrier, the average has been narrowing indicating a breakthrough near. The daily chart MACD red kinetic energy column was basically stable, while the KDJ random index held steady above the 50 level, indicating that the bullish momentum for gold is not strong and is currently prone to volatility.
On the 4-hour chart, gold continued to slide after hitting $1,930 and is currently testing its 200-day moving average of $1,912. MACD red kinetic energy column gradually weakened, KDJ random indicator from the overbought level down, indicating gold short term or further lower.
On daily charts, silver has retreated after three days of gains and is trading around $24.85. The daily chart MACD red kinetic energy column was largely stable, while the KDJ random index held steady above the 50 level, indicating that silver bullish kinetic energy was little changed, or further volatility.
The 4-hour chart shows silver falling after continuing to rise above its 200-day moving average. The 60-session moving average below is now being watched to see if it can be held. The MACD red momentum column turned to gradually weaken, and the KDJ random indicator fell from the overbought level, indicating that silver bullish momentum weakened, short term or further downward.
Fundamentals positive factors:
- White House Chief of Staff Mark Meadows said Wednesday that the biggest sticking point in the novel Coronavirus agreement negotiations remains to fund for state and local governments, but added that progress has been made toward an agreement. — THE U.S. stimulus is betting against the dollar.
- Pelosi has said a compromise bailout plan has been drafted, hinting that a deal with the White House could be near. — Betting that a U.S. stimulus deal is good for gold.
- A spokesman for Pelosi said she and Treasury Secretary Mnuchin “continued to narrow their differences” in their discussions on Monday, with Pelosi hopeful of getting a “clear” message by the end of Tuesday on whether the Corona-stimulus package is likely to be passed before the November 3 election. — Gold is still expected to benefit from the US financial rescue plan.
- The Leader of the Democratic Party In the United States Nancy Pelosi says a phone call with the Treasury Secretary Steven Mnuchin over the weekend made good progress. She was upbeat about the prospects for the talks and set Tuesday as a deadline for a deal on the rescue package before November’s presidential elections. Markets saw it as a sign of progress. — Positive developments in the stimulus package are positive for gold.
Fundamentals negative factors:
- America’s new stimulus package is still stuck. Ms. Pelosi had set a deadline on Tuesday to negotiate a rescue package before next Month’s election in March but has so far conspicuously failed to reach a deal. — The lack of a deal has put a brake on gold’s rise.
- Senate Majority Leader Mitch McConnell said Monday that a vote on the stimulus bill would be held on Tuesday and Wednesday. About $500 billion, it would renew a small business loan program and provide more unemployment benefits, school aid, and money for virus testing. Smaller stimulus packages are bad for gold.
- Senate Majority Leader Mitch McConnell said On Saturday that a vote on the smaller $500bn stimulus bill would be held on The 20th and 21st, with a separate vote on the Pay Protection Plan bill to bail out small and micro-businesses. Smaller stimulus packages are bad for gold.