Improving economic data bolstered investors’ belief that the U.S. economy is on the verge of a stimulus-supported recovery, sending stocks across the board higher, though questions about trade with China continued to unnerve investors.
Spot gold is trading around $1,780 and yesterday hit another eight-year high, hitting as high as $1,785, with futures briefly breaching the crucial $1,800 level.
As for coVID-19, according to real-time statistics released by Johns Hopkins University, as of 07:33 Beijing time on July 1, the cumulative number of confirmed coVID-19 cases worldwide has exceeded 10.43 million, with 10,434,835 confirmed cases and 509,779 deaths so far.
In the United States, there were more than 2.62 million confirmed cases of COVID-19, or 2,629,372, and more than 120,000 deaths, or 127,322.
In u.s.-China relations, the U.S. Federal Communications Commission on Tuesday labeled Chinese telecommunications companies Huawei and ZTE a national security threat, barring U.S. companies from using $8.3 billion in government funds to buy their equipment.
In November, the FCC voted 5-0 to approve the announcement and proposed requiring rural telecom carriers to replace the Chinese companies’ equipment in their existing U.S. networks.
The Trump administration has been pressing Chinese companies on security. U.S. officials are urging countries around the world not to use Huawei’s network gear in the next generation of wireless networks, known as 5G.
In addition, China and the United States also have new information on the Hong Kong issue. The US Commerce Department announced on Monday that it had withdrawn special treatment for Hong Kong. According to reports, the US Department of Commerce released a statement on its website on Monday local time, saying that it has cancelled special treatment for Hong Kong, including the suspension of export license exemption, and is conducting a differential treatment evaluation.
Hong Kong’s National Security Law was approved by the Standing Committee of the National People’s Congress (NPC) on Tuesday. The Hong Kong government gazetted the law at 11 PM on Tuesday, and the specific provisions of the law will come into effect at night.
The 27 countries, including France, Britain and Germany, issued a joint statement at the UN Human Rights Council after Hong Kong’s security law was passed, calling on Beijing to “rethink” the law, AFP reported.
U.S. House of Representatives Speaker Nancy Pelosi has called for sanctions and other actions against China, saying all available tools, including visa restrictions and economic sanctions, must be considered in response to China’s passage of the Port zone security law.
Rory Green, an economist at TS Lombard, said: “We knew this was happening more than a month ago. Last year’s protests accelerated the process and were a key trigger for Beijing to exert more control over Hong Kong. In terms of economic impact, trade is likely to be affected as goods shipped through Hong Kong ports are largely technical products. At this point, it is unlikely to undermine trade agreements, “he said.
As for gold, UOB said in its third-quarter outlook, “the question is not whether the gold rally will last, but how strong it will be.” However, the bank believes gold won’t break the 1,800 level until the end of the third quarter.
Thomas Puppendahl, founder of Chancery Asset Management, said the precious metals market is in the early stages of a bull market that will be followed by one of the most volatile bull markets in history. Over the medium term, gold is seen heading for $3, 000-5, 000 an ounce, while silver is seen heading for $50 an ounce.
On the daily chart, the U.S. dollar index remained a narrow shock pattern, the overall small pressure. The daily chart MACD red momentum column was little changed, with the KDJ random index hovering slightly below overbought levels, indicating that the dollar rebound momentum is still in place but weak, and further volatility is expected.
On the 4-hour chart, the USD index appears to be setting an uptrend low, with an eye on whether the high of 97.80 can be broken. The MACD green momentum column expanded slightly, with the KDJ random index falling below the 50 level, indicating a strengthening of the dollar’s short-term downward momentum or further weakness.
On the daily chart, gold continued its volatile rally in recent days, with the focus on breaking above the previous high of $1,785. The daily MACD red momentum column held steady and the KDJ random index hit an overbought level, indicating gold’s upward momentum remained solid but wary of a pullback.
On the 4-hour chart, gold seems to form a continuous upward high and low, having reached all moving averages, MACD red kinetic energy column slightly expanded, KDJ stochastic approaching the overbought level, indicating that gold short-term kinetic energy strengthening, there is still room for further gains.
Fundamentals positive factors:
- According to real-time statistics released by Johns Hopkins University, as of 07:33 Beijing time on July 1, the cumulative number of confirmed cases of COVID-19 worldwide has exceeded 10.43 million, with 10,434,835 confirmed cases and 509,779 deaths so far. In the United States, there were more than 2.62 million confirmed cases of COVID-19, or 2,629,372, and more than 120,000 deaths, or 127,322.
2. The U.S. Federal Communications Commission on Tuesday labeled Chinese telecommunications companies Huawei and ZTE a national security threat, barring U.S. companies from using $8.3 billion in government funds to buy their equipment.
- After the passage of Hong Kong’s security law, 27 countries, including France, Britain and Germany, issued a joint statement at the UN Human Rights Council, calling on Beijing to “reconsider” its security law, AFP reported.
- The US Department of Commerce said in a statement on its website Monday local time that it has cancelled special treatment for Hong Kong, including the suspension of export license exemption, and is conducting a differential treatment assessment.
Fundamentals negative factors:
- In testimony before the House Financial Services Committee on Tuesday, U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Colin Powell expressed their willingness to do more for the U.S. economy to mitigate the devastating impact of the outbreak.
- According to the National Housing Price Index report released on June 30, the price of previously owned homes in the United States increased by 4.7% in April, compared with 4.6% in March. Prices of previously owned homes in the U.S. have been accelerating since the fall of 2019.
3. Another report on June 30 showed U.S. consumer confidence rose more than expected in June as optimism grew as businesses reopened. But the index is still well below its pre-outbreak level.
4. Data from the National Association of Realtors, or NAR, showed the monthly sales index of previously owned homes surged 44.3 percent to 99.6 in May, the biggest increase since the data began in 2001, suggesting the housing market is starting to recover after being hit by the epidemic and other economic factors.