Gold investment: bear offensive continues! At one point, gold was down more than $12! Buying a new outbreak is coming?

International spot gold was at $1, 677.30 an ounce in Asian trading on Monday. Gold extended its decline throughout the day, briefly falling more than $12 to a low of $1671.30 an ounce from the day’s high. It is still in a tight range and struggling to recover from the low. Sustained a pullback from a multi-year high of $1,746.90 an ounce, marking the fourth consecutive day of declines.

The price of gold rose as high as $1,718.20 an ounce after opening at $1,716.36 an ounce in early trading. It fell as low as $1,678.75 to close at $1,684.19, down $33.41, or 1.95 percent, and down $4.71, or 0.28 percent, for the week. Gold is down more than $60 from a 7 1/2-year peak of $1,746.40 an ounce earlier in the week as it surged on fears of the worst recession in decades.

Meanwhile, COMEX gold futures for June ended down $32.9, the third straight day of losses, at $1698.80 an ounce.

Gold rose before falling in the past week, climbing strongly to a 7 1/2-year high on Tuesday and approaching the $1,750 mark on the back of economic concerns over COVID 19. Gold was relatively quiet on Wednesday and Thursday. But it didn’t last long as gold came under intense bearish pressure on Friday, falling below the $1,700 mark after US President Donald trump’s announcement of a three-stage economic plan to restart the economy and news of the efficacy of the redersivir prompted short sellers to pounce.

Global stock markets rallied for a second week after President Donald trump announced plans to gradually restore the U.S. economy to health after being hit by a coronavirus. Gold has sometimes moved in tandem with equities this year, and the recent sharp fall has prompted investors to sell precious metals to make up for losses in other markets.

“Gold futures should get a boost over the next week,” said Phillip Streible, chief market strategist at Blue Line futures. They are doing a good consolidation around these higher levels. Gold held near $1,700. We expect it to hit $2,000 by the end of the year.”

Phil Flynn, senior market analyst at Price Futures Group, expects gold to rebound. Flynn said while gold prices weakened last week as the dollar rebounded, the outlook remains bullish as governments around the world will need to keep printing money to support the global economic recovery.

Adrian Day, chairman and chief executive of Adrian Day asset management, said gold had gone too far, too fast, and that a correction could follow. Gold prices fell as equity markets recovered on optimism about the economic recovery. Based on the new global monetary situation, the fundamentals for this year and beyond remain very positive.

Sean Lusk, co-head of commercial hedging at Walsh Trading, said he expected the correction to continue to around $1,675 in the near term. However, he also said he thought the long-term trend was still bullish. Gold prices in the short – term correction, long may brew a new outbreak!

Technical analysis:

The dollar

On the daily chart, the dollar index into a narrow consolidation pattern, MACD green momentum column slightly narrowed, KDJ random index turned higher, indicating that the dollar upward momentum is still alive, next expected to rebound again.

On the 4-hour chart, the dollar index at the low to maintain a fairly narrow range of consolidation trading, MACD green kinetic energy column unchanged, KDJ random index slightly upward, indicating that the dollar may continue to maintain a narrow range of consolidation trend.

gold

On the daily chart, the gold price retreated further from the high, the MACD red kinetic energy column significantly narrowed, the KDJ random index further fell, indicating that gold downside momentum intensified, and then may further retreat.

On the 4-hour chart, gold extended its pullback from its recent high, with the MACD green momentum column unchanged and the KDJ random index mildly under pressure, indicating gold will continue to be under pressure in the short term.

fundamentals positive factors:

  1. Worldometers world real-time statistics show that as of 8:40 PM Beijing time on April 20, global covid-19 cumulative confirmed cases of more than 2.4 million, reached 2407, 211 cases, cumulative deaths reached 165, 046 cases. The United States has the highest number of cumulative confirmed COVID 19 cases in the world, with more than 760,000 cases, reaching 764303, and a total of 40548 deaths.
  2. Protests against home segregation orders broke out across the country on April 18, in Michigan, Ohio, Kentucky, and Minnesota.
  3. The conference board’s leading index fell 6.7% in March, the biggest monthly decline since the series began in 1959. The 60-year old index fell sharply, breaking a record 3.4 percent drop set in October 2008, when financial panic plunged the us into its worst recession since the second world war. The fall in April will almost certainly be bigger — and probably much bigger. The economy didn’t stall until late march as state and federal efforts to slow the spread of the coronavirus intensified.
  4. The number of Americans filing for unemployment benefits hit 5.245 million on Thursday. Adding in the three initial claims reports from the labor department, U.S. jobless claims climbed to 2.02 million in the past four weeks. That is slightly lower than the 22.442 million nonfarm jobs added since November 2009. The U.S. economy began adding jobs again in November 2009 for the first time since the recession.

Fundamental negative factors:

  1. U.S. President Donald Trump says he is closing in on an agreement on additional stimulus, and that an answer may come Monday. He had just finished a phone call with U.S. Treasury Secretary Steven Munchin.
  2. US President Donald Trump on Thursday set out guidelines for a three-stage state-wide economic reboot, setting out testing standards states must meet and requiring the rapid provision of protective gear to reopen. The governors of each state can carry out the guidelines according to the conditions of their own state, rather than relying on the orders of the federal government. The guidelines, titled “open America again,” have not yet been officially released, and Mr. Trump has distributed documents to state governors.
  3. US President Donald Trump said on Wednesday that the us had passed the “peak” of the coronavirus outbreak. On Thursday he will discuss guidelines for reopening the United States. Now Trump has canceled plans to set up a new task force to revive the economy and instead has held a series of phone calls with business leaders, according to two sources.
  4. German chancellor Angela Merkel said on Wednesday that her country would begin easing restrictions on its economy from April 20. Shops under 800 square meters can be reopened if measures are taken to “keep them clean”.

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