Gold investment: bulls beware! Oil market collapse down the market fragile nerve! Does gold stand on the brink of another plunge?

International spot gold was at $1, 683.70 an ounce in Asian trading on Wednesday. During the day, gold maintained the trend of volatile rebound, the previous session fell sharply to $1659.60 / oz, then from the low volatility higher, now continue to maintain an upward trend.

The previous session’s spot gold subsession opened at $1,694.50 an ounce, rose as high as $1,697.30 an ounce, and dipped as low as $1,659.68 an ounce to close at $1,685.90, down $8.92, or 0.53 percent.

Meanwhile, COMEX crude for June delivery ended down $23.40, or 1.4 percent, at $1,687.80 an ounce, as investors turned to the U.S. bond market as oil prices fell for a second day in a row.

Separately, holdings of the SPDR Gold Trust, the world’s largest Gold ETF, are at their highest level in more than three years.

Bob Haberkorn, senior market strategist at RJO Futures, said: “oil has really brought down the whole commodity market and a lot of people are selling out of lucrative positions and waiting to see if energy spreads further into precious metals. If the panic continues to spread, precious metals such as gold could be sold indiscriminately again.”

FXTM analyst Lukman Otunuga said: “the historic drop in oil prices and heightened fears of a severe global recession could trigger another wave of demand for capital, with gold facing a downward shock as the dollar rises. “While an adverse global macroeconomic environment, the turmoil surrounding the outbreak of coronavirus and the gloomy outlook for the oil market may accelerate the flight to safety, gold may not be the preferred safe investment destination for investors.”

Brent crude fell 25 per cent to its lowest level in nearly 20 years. WTI crude for June settled at $11.57 a barrel, the lowest since February 1999, after falling about 70 percent during the session.

US President Donald trump said on Tuesday he would ask big companies to return the money they received from the federal stimulus because it was designed to help small businesses.

Meanwhile, the us Treasury secretary Steven mnuchin said the government’s emergency funds were aimed at helping small businesses in trouble, and Mr Trump said he would ask big companies to return the money they received from the stimulus. Mr Mnuchin warned that companies that did not meet the criteria but received money from the scheme and did not return it would face “serious consequences”.

In addition, trump announced a major decision. On April 21, local time, trump announced at the White House briefing on the outbreak that he plans to issue a 60-day executive order suspending the immigration of foreign nationals to the United States. Mr Trump said the order would only apply to people applying for permanent residency and would not affect short-term visitors.

“By suspending immigration, we will help unemployed americans find jobs when the American economy reopens,” trump said. “It is wrong and unfair for new immigrants from abroad to replace americans who have lost their jobs because of the virus. We have to take care of American workers first.”

Mr Trump said farmers and workers would not be affected and promised to “find ways to make it easier for these workers to go to work on farms”. It says the move is in response to a surge in unemployment caused by the new outbreak. It says the policy will ensure more job opportunities for unemployed americans.

The order applies only to green card applicants, valid for 60 days, but does not affect temporary workers on non-immigrant visas, the Washington post reported.

Technical analysis:

The dollar

On the daily chart, the dollar index continued the trend of the recent rebound shock, MACD green momentum column unchanged, KDJ random index further higher, indicating that the dollar upward momentum is still in place, the next expected to further extend the rebound.

On the 4-hour chart, the dollar index temporarily closed trading in a narrow range, MACD red kinetic energy column unchanged, the KDJ random index moderate pressure, indicating that the dollar may be trapped in a short range for a period of consolidation.

gold

On the daily chart, the gold price maintains the retracement trend since the high, the MACD red kinetic energy column significantly narrowed, the KDJ random index further declined, indicating that gold downward momentum intensified, and then may further extend the retracement trend.

On the 4 hour chart, gold prices show a consolidation pattern, MACD green kinetic energy column unchanged, KDJ random index moderately higher, indicating that gold will continue to consolidate short – term.

fundamentals Positive factors:

  1. According to the real-time statistics released by Johns Hopkins university, there were more than 2.56 million confirmed covid-19 cases and 176,926 deaths globally. More than 820,000 cases have been confirmed in the United States, with a total of 44,805 deaths.
  2. US President Donald trump announced at a White House briefing on the outbreak on Tuesday that he plans to issue a 60-day executive order suspending immigration to the us by foreign nationals. Mr Trump said the order would only apply to people applying for permanent residency and would not affect short-term visitors. “By suspending immigration, we will help unemployed americans find jobs when the American economy reopens,” trump said.

3, April 21, President of the United States the latest published a trump tweets: “we will never disappoint the great American oil and gas industry, I have directed energy minister and finance minister to develop a plan, in order to provide funds, these very important company and work in the future for a long period of time are guaranteed!”

  1. U.S. existing home sales fell at an annualized rate of -8.5 percent in March, the biggest drop since November 2015. Sales of previously owned U.S. homes fell at their fastest pace in four and a half years in March as unconventional measures stemming from a new outbreak virtually halted home buying, bolstering analysts’ view that the economy will contract sharply in the first quarter. The figures reflect contracts signed in January and February, before the new outbreak crippled the economy, so April sales are likely to fall more sharply.

Fundamental negative factors:

  1. President Trump said on Tuesday that the hospital ship Comfort, deployed in New York, would leave the city “in preparation for the next mission.” The comfort is being used to provide emergency assistance to health workers fighting the coronavirus. “There is light at the end of the tunnel,” Trump said of the COVID 19 outbreak. Last week, Mr. Trump said that none of the patients on board showed that New York City was recovering. “It’s a good thing they don’t need it. This is a good thing. I think it shows that New York is making progress.”
  2. Democrats and Republicans disagreed Monday over who should be held responsible for the delay as they worked out the details of a bailout that could exceed $450 billion.
  3. US President Donald Trump says the drop in oil prices is very short-lived. Now is a good time to buy crude, and hopefully, Congress will support it. Up to 75m barrels of oil are being studied for inclusion in the strategic petroleum reserve.
  4. On April 16, U.S. President Donald Trump laid out guidelines for a three-stage state-to-state economic reboot, set testing standards that states must meet, and required 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.

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