In the Asian session on Friday, spot gold continued to fall short of the key 1940 mark, while silver remained under pressure below $27.
Gold retreated yesterday as dollar weakness after the European Central Bank left policy unchanged helped push the metal above $1960, but the failure of a $300bn REPUBLICAN rescue package in the US erased gains and ended little changed at around $1,945.
On September 10 local time, the SENATE voted 52-47 against a new version of the COVID-19 economic stimulus bill, but failed to meet the minimum threshold of 60 votes to pass it.
All Democrats voted against the Republican-sponsored bill, with one Republican voting against it.
Sen. Rand Paul of Kentucky, the only Republican to vote against the plan, opposed deficit spending.
The bill, known as a “slimmer” version, is worth between $500 billion and $700 billion more than the $3 trillion stimulus package Democrats proposed in the House of Representatives.
The bill includes $105 billion to help schools open; A $10 billion loan write-off for the U.S. Postal Service; $300 per person per week for unemployment insurance, etc. But it does not include direct subsidies to the American people or aid to all levels of government.
Democratic leaders have proposed a rescue package of about $3tn, a far cry from what Republicans have proposed.
Before the vote, Democratic House Speaker Nancy Pelosi and Senate Minority Leader Charles Schumer had vowed to block passage of the bill. In a statement, Ms Pelosi said it was “a bill that Republicans know Democrats will never support”.
Senate Minority Leader Chuck Schumer, a Democrat, called the bill a “watered down” bill that ignores critical issues such as aid to state and territory governments and tourism, and is a “partisan product” that will not pass.
Since the COVID-19 outbreak, the US congress has passed four rounds of economic stimulus packages that have allocated more than $2tn, but many assistance, including unemployment insurance, have expired at the end of July. Negotiations on the stimulus package have been going on for months and no agreement has been reached. By law, Congress is in recess before the election.
With some senate seats up for re-election in November, senators will begin to focus in the coming weeks on what could be the last vote on the new bailout bill before the general election.
As for the outlook for gold, Invesco investment strategist Talley Leger said the long-term upward trend is unlikely to change anytime soon as gold remains above the key $1,900 an ounce level.
George Gero, managing director at RBC Wealth Management, said, “A fall in gold and silver attracts bargain-hunters with afternoon targets of $2,000 and $30, respectively.”
On the daily chart, the DOLLAR index bottomed out yesterday and is now trading around 93.30. The daily chart MACD red kinetic energy column turns to steady, with the KDJ stochastic approaching the overbought level, indicating that the short-term bullish momentum is stable, or further volatility.
On the 4-hour chart, the DOLLAR index, which briefly broke below its 60-session average, quickly rallied and is now back near its 20-session average. MACD green momentum column continued to weaken, KDJ random indicator above the 50 level, indicating the dollar bearish momentum weakened, short term is expected to move higher.
On daily charts, gold rallied yesterday and is now trading around $1940. The daily chart MACD green momentum column was largely stable, while the KDJ random index held steady below the 50 level, indicating that gold bearish momentum remains or further volatility.
On the 4-hour chart, gold prices briefly broke above their 200-day moving average before continuing to retreat and are now close to their 20-day moving average. MACD red kinetic energy column continued to weaken, KDJ random index from the overbought level near the sharp downward, indicating that gold bullish momentum weakened, the short-term risk of further downward.
On daily charts, silver continued its choppy trend of previous days and is now trading around the $26.65 mark. The daily MACD green momentum column was little changed, with the KDJ random index trading below the 50 level, indicating solid bearish momentum for silver and further price volatility.
On the 4-hour chart, silver continued to fall after hitting a high of 27.48 and is now testing its 200-day moving average for support. The MACD red momentum column continues to weaken and nearly disappears, and the KDJ random index drops sharply below the 50 level, indicating a sharp drop in bullish momentum for silver, short term or further volatile lower.
Fundamentals positive factors:
- It is reported that Australia has revoked the visas of two Chinese scholars due to “national security concerns”. This has significantly increased tensions between the two countries.
- Trump said on Thursday that Bytedance’s deadline for selling U.S. assets from TikTok, a popular short video app, would not be extended.
- The United States has revoked the visas of more than 1,000 Chinese nationals as of this week, a State Department spokesman said Wednesday. The move is part of the Trump administration’s efforts to block the entry of Chinese students and researchers whom the U.S. believes have ties to the Chinese military.
- While the ECB closely monitors exchange rates, they are not a monetary policy tool, said ECB President Christine Lagarde. Her comments suggested the ECB was unlikely to take steps to weaken the euro despite its recent gains, giving traders an incentive to push it higher.
Fundamentals negative factors:
- The situation in China and India has cooled down. Chinese Foreign Minister Wang Yi and his Indian counterpart Sushma Jaishankar held a bilateral meeting in Moscow on September 10. After comprehensive and in-depth discussions, the two sides reached five-point consensus on the current situation.
- The Republican-controlled US Senate on Thursday held a procedural vote on a pocketable new $300bn bail-out bill, but failed to pass it in the face of Opposition from Democrats.
- Major U.S. stock indexes ended higher Wednesday, snapping a three-day losing streak, as investors took advantage of a pullback in technology stocks and a day after the Nasdaq confirmed it was in correction territory.
- In a post on social media on Monday, Ms. Von Der Leyen urged Mr. Johnson to honor the commitments made in the Brexit agreement signed late last year. Brexit turmoil hits euro, boosts DOLLAR