Gold investment: bad technical? Gold repeatedly test 1700! Short – term fear of a wave of correction!

Spot gold continued to rebound in Asian trading on Monday after a sharp fall on Friday and has now briefly broken above the 1710 mark, with comments from federal reserve chairman colin Powell the focus of the week.

Spot gold remained volatile last week, falling to the $1,680 mark on Wednesday before rallying sharply to break through the $1,720 mark on Thursday. On Friday, following the release of the closely watched U.S. jobs report for April, gold quickly retreated after surging and hitting this week’s high to close just above the $1,700 mark.

Statistics from real-time data update website world meters show that as of 10:36 Beijing time on May 11, there were more than 4.18 million confirmed cases of COVID-19 worldwide, with a total of 4,180,305 confirmed cases and 283,860 deaths of more than 280,000.

Among them, the total number of confirmed covid-19 cases in the United States has exceeded 1.36 million, or 1,367,638, and the total number of deaths has exceeded 80,000, or 80,787.

On Friday, the labor department said non-farm payrolls fell 20.5 million in April and the unemployment rate soared to 14.7%, the highest since the early 1930s. The labor market is expected to weaken sharply, based on initial jobless claims in the past few weeks.

Seema Shah, chief strategist at principal global investors, said: “the us economy has paid a heavy price to contain covid-19. “The jobs data not only clearly illustrate the extent of the economic disaster that has followed the economic data that have been coming out in recent weeks, but it also has a significant impact on expectations for the recovery.”

“There is a lot of uncertainty about whether these jobs will come back,” said Sean Lusk, co-head of commercial hedging at Walsh Trading. Some won’t, and hopefully most of them will come back. I think it’s just a matter of time before it gets to at least $1,750.”

Richard Baker, editor of the Eureka mining report, is among those expecting further gains. He said that while 20.5 million jobs were lost in April, better than the 21.5 million expected, recent trade tensions between China and the U.S. appear to have abated. “These are at best a gradual improvement in a dire situation,” he said. As a result, he said, investors’ rush into risky assets on Friday morning could easily be replaced by “risk off” behaviour, especially after another bad piece of news.

Daniel Pavilonis, senior commodities broker at RJO Futures, said he expects gold to fall back in the near term, though he doesn’t think the long-term rally is over yet.

He said gold futures had fallen below $1,700 several times before bouncing back above it. But each time, gold has tended to hit a lower high. “So for me, technically, it seems like it’s starting to weaken. I don’t think the rebound is over yet. Over time, I think gold will go up. But I think for now it will pause and fall for a while.”

Mark Leibovit, publisher of VR Metals/Resource Letter, said he “tends to be more bearish and expects a correction in the near future”. However, he added that he was “more optimistic” about gold later this year.

Technical analysis:

The dollar

On the daily chart, the dollar index bottomed out on Friday and rebounded after briefly touching 99.45, now trading around 99.70. From a technical perspective, MACD green kinetic energy column weakened nearly disappeared, RSI index hovering around 50, KDJ random index at the 50 level in a narrow range shock, suggesting or continue consolidation.

As can be seen from the 4-hour chart, the usd index continues the trend of a 100.40 pullback from its peak and is now trading in a narrow range just above its 50-period moving average, with a focus on the 100-period moving average. The MACD green kinetic energy column stabilizes, the KDJ random indicator tries to rebound from around the overbought level, and the short term is still under downward pressure.

gold

On the daily chart, the overall gold price is still in the pattern of high consolidation, currently trading above the 1700 level. Despite the recovery of risk sentiment on Friday, the gold price still holds the 1700 level, which also highlights the firmness of 1700 support. MACD green kinetic energy column weakened slightly, KDJ random index to rise above the 50 level, focus on the possibility of further rise.

As can be seen from the 4-hour chart, the gold price has been falling from the 1720 level, but it has basically held its 50-day moving average of 1700, and we are looking to see if it can stay above this moving average for many days. MACD red kinetic energy column slightly weakened, KDJ random index downward approaching 50 level, up kinetic energy or insufficient.

Fundamental positive factors:

  1. According to statistics from real-time data update website worldometers, as of 10:36 Beijing time on May 11, the global total number of confirmed covid-19 cases exceeded 4.18 million, with a total of 4,180,305 confirmed cases and 283,860 deaths exceeding 280,000.

2, May 10, integrated media reports, the White House will be coronavirus pneumonia outbreak response three members of the working group, director of the national institute of allergy and infectious diseases Fauci (Anthony Fauci, director of the CDC reed field (Robert Redfield) and the United States food and drug supervision bureau of Hahn (Stephen Hahn) because the contact will be coronavirus infection and isolation.

Non-farm payrolls fell 20.5 million in April, the labor department said on Friday, and the unemployment rate soared to 14.7 percent, the highest since the early 1930s.

  1. Larry Kudlow, director of the White House national economic council, told reporters Friday that the White House has stopped negotiating with Congress on any further stimulus package to combat the pandemic and is waiting to see the economic impact of the reopening of U.S. states this month.

Fundamental negative factors:

  1. Senior trade representatives from the United States and China played down serious differences over economic losses caused by the novel coronavirus pandemic and said they would press ahead with the implementation of the “first phase” trade agreement after the call.
  2. President Trump and vice president pence tested negative for novel coronavirus, a White House spokesman said Thursday.
  3. US President Donald Trump tweeted that the White House COVID-19 response task force would work indefinitely, but with a new focus on security and restarting the economy.
  4. House Democrats are pushing through a sweeping fifth round of novel coronavirus rescue legislation in what could be their most far-reaching effort yet to deal with the economic impact of a pandemic, with a trillion-dollar stimulus package in the works. The cost of the plan could match or exceed the $2.2 trillion CARES act passed in March.

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