Gold investment: bull boiling! Gold prices soared close to $1,765! But the technical side is releasing “ominous”!

Spot gold broke through the 1,760 marks on Monday, hitting near $1,763, its highest level since October 2012, as concerns about deteriorating u.s.-china relations and gloomy U.S. economic data supported the safe-haven metal.

Gold bulls broke out in a big way last week, rising for the fourth day in a row to hit a 7 1/2-year high above 1,750, up more than $40, or about 2.4 percent, for the week.

Statistics from real-time data update website worldometers show that as of 10:22 Beijing time on May 18, there were more than 4.8 million confirmed cases of covid-19 worldwide, with a total of 4,801,875 confirmed cases and 316,000 deaths, totaling 316,671.

Among them, the total number of confirmed covid-19 cases in the United States exceeded 1.52 million, with 1,527,664 cases, and the total number of deaths exceeded 90,000, with 90,978 cases.

Relations between China and the United States are jangling market nerves at the moment. Washington (Reuters) – the “first phase” trade agreement reached between the United States and China in January has not collapsed and the two countries are still implementing it, chief White House economic adviser larry kudlow said on Monday. He told reporters at the White House that the trade deal was “continuing” after President Donald trump said he might cut ties with China.

A journalist asked on May 15 whether the us-china trade agreement was broken. “Absolutely not,” Mr. Kudlow said, adding that the Chinese were working to fulfill their commitments to the agreement. “They are a little bit behind in terms of merchandise purchases,” kudlow said. I think it has a lot to do with the state of the market and the economy.

Kudlow said Treasury secretary Steven mnuchin and U.S. trade representative Robert lighthizer had a successful phone call with the Chinese last week, and that their deputies communicated well Thursday night.

“We have other issues to address with China, including, of course, the source of the virus,” kudlow said. But as far as trade agreements are concerned, they are definitely continuing to be implemented.

Investors were also rattled last week by news of us restrictions on huawei’s upgrade. A year after huawei was added to the list of entities, Reuters reported on May 15 that the U.S. Commerce Department had extended huawei’s temporary license until August 13, but was also changing an export rule to block the company’s chip supply chain. Under the rules, foreign companies using American chip-making equipment would need a U.S. license to supply certain types of chips to huawei or its affiliates, such as hsi semiconductor.

On May 17, the Commerce Department responded to the new us export control rules on China by urging the us to stop the wrong practices immediately. The press office of the ministry of commerce responded that China has taken note of the new export control regulations against huawei released by the United States. China is firmly opposed to this.

Amid rising tensions between China and the United States, bad economic data and fears of a second outbreak of the virus, gold has done well recently, rising above the 1,760 mark.

“Gold has risen somewhat in recent months, but we believe it is one of the most undervalued investable assets at the moment,” Singer’s Elliott Management corp. wrote in an April letter to investors.

He argued that low interest rates, mining disruptions and “crazy devaluations by all the world’s central Banks” would lead to gold prices rising to “several times the current price”.

Russ Koesterich, a portfolio manager at BlackRock’s $20.5 billion global allocation fund, points out that gold has an inverse relationship with real interest rates: when inflation-adjusted interest rates are low, so is the opportunity cost of owning gold. At the moment, real interest rates are negative. This means that even if inflation does not accelerate, the prospect of policy rates near zero or even negative for the foreseeable future should make gold more attractive.

“In an environment where bond yields are close to zero and inflation is clearly negative, there is no opportunity cost to owning gold. Historically, this has been the best time for gold, “said Koesterich, who has been adding to his gold holdings.

Technical analysis:

The dollar

On the daily chart, the U.S. dollar index is trading around 100.30, above its main moving average after three days of gains. Technically, the MACD red kinetic energy column expanded slightly, the RSI index hovered above 50, and the KDJ random index hit the overbought level upward, alert to the possibility of a pullback.

On the four-hour chart, the uptrend in the dollar index appears to be confirmed and is currently testing the 100.56 level, a short-term high, to see if it can break through. MACD green kinetic energy column preliminary appearance, KDJ random index hovering near the 50 level, short line or continue to shock.

gold

On the daily charts, gold has soared above the previous year’s high of $1,747 and is now above the $1,760 mark, a particularly sharp rise. MACD red kinetic energy column preliminary appearance, KDJ random index hit the overbought level, alert to the possibility of a pullback.

As you can see from the four-hour chart, gold has been particularly strong, continuing to rise after breaking through the 1730 mark and is now above all averages. MACD red kinetic energy column gradually expanded, KDJ random index has reached the overbought level, beware of short – term correction.

Fundamental positive factors:

  1. Statistics from real-time data update website world meters show that, as of 10:22 Beijing time on May 18, there were more than 4.8 million confirmed cases of covid-19 worldwide, with a total of 4,801,875 confirmed cases and a total of 316,000 deaths, totaling 316,671.
  2. Us retail sales plunged 16.4 per cent in April, the lowest on record, according to a Commerce Department report released on Friday, as the pillars of the us economy shrank in the wake of the coronavirus pandemic.
  1. According to a report by Reuters on May 15, the us Commerce Department has extended huawei’s temporary license until August 13, but is also changing an export rule in an attempt to completely block huawei’s chip supply chain. Under the rules, foreign companies using American chip-making equipment would need a U.S. license to supply certain types of chips to Huawei or its affiliates, such as hsi semiconductor.
  2. New claims for state unemployment benefits hit 2.981 million last week, labor department data showed on Thursday, bringing the total number of new claims since the coronavirus crisis to nearly 36.5 million, the largest job loss in U.S. history.

Fundamental negative factors:

1.The “first phase” trade agreement reached between the United States and China in January has not broken down, and the two countries are still implementing it, chief White House economic adviser larry kudlow said Monday.

2.Trump predicts that there will be more than 100,000 COVID-19 deaths in the United States. Mr. Trump also took a sudden stance in favor of the dollar, saying it was a good time for it to strengthen and it was a great thing to have a strong dollar.

3.US President Donald trump said on Wednesday he still strongly believes the federal reserve should implement negative interest rates, but gave a nod to fed chairman colin Powell.

  1. Atlanta federal reserve bank President Raphael Bostic said recently that negative interest rates are not a good option in a time of crisis.

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