In Asian trading on Wednesday, spot gold continued its rally, hitting $1,920 at one point, while silver extended gains to 2 per cent and broke through the $25 mark.
Stocks in the Asia-pacific region were mixed early Wednesday as investors continued to focus on the novel Coronavirus stimulus package in the U.S.
Investors’ focus on Wednesday is likely to be on the U.S. stimulus talks. Pelosi, who said a compromise bailout plan had been drafted, signaled a deal with the White House could be near, sending all three major U.S. stock indexes up more than 1 percent in intraday trading.
Mark Meadows, the White House chief of staff, said the Trump administration and Democrats made progress in talks on Tuesday, but significant differences remain.
Mnuchin and Pelosi Shared a 45-minute phone conversation on novel Coronavirus detection and tracking, but were still far apart on grants to local governments and protection from lawsuits, Meadows said in an interview with CNBC. The two agreed to continue a phone call on Wednesday to discuss the issue.
A spokesman for House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin said they are close to reaching an agreement on a bailout bill and that they are serious about finding a compromise and that negotiations will continue On Wednesday.
Pelosi had earlier said Tuesday’s deadline for negotiations was not too important and said she hoped an agreement on the Covid-19 aid package would be reached by the end of the week.
U.S. President Donald Trump pushed for a comprehensive new Champions bailout plan on Tuesday and said he would accept a deal worth more than $2.2 trillion, despite Senate Republicans’ opposition to large spending measures.
“Even if no agreement is reached before the November election, hopes are high for a post-election package,” Tapas Strickland, head of economics at National Australia Bank, wrote in a report.
“There is no doubt that the markets will be watching the talks in Washington closely,” said analysts at Commerzbank. If there is a deal, gold prices could go up.
David Meger, head of metals trading at High Ridge Futures, said the gold market is taking a wait-and-see approach to the stimulus plan. It appears that republicans and Democrats are still at odds over the wording of some issues; Still, there is some hope that some sort of stimulus package can be agreed, which is clearly the most important factor for markets in the short term.
In terms of coronavirus vaccine, local time, according to the Wall Street journal reported on October 19th, an American biotechnology company Moderna, chief executive of Stephane Bancel said recently that the U.S. government may approve its experimental in December will be coronavirus vaccine emergency use authorization, the premise is in November, the company from a large clinical trial positive interim results.
Daily chart, the dollar index continued to fall 3 days before the momentum, the day continued to fall to defend the 93 mark. The daily chart MACD green momentum column gradually expanded, and the KDJ random index fell sharply from the 50 level, indicating that short-term bearish momentum strengthened and prices may fall further.
On the 4-hour chart, the USD index continues its previous downward trend and is now back below all averages. The MACD green momentum column gradually expanded, and the KDJ random indicator continued to hit the oversold level, indicating that dollar bearish momentum has strengthened and short-term caution against oversold will lead to a correction.
On the daily chart, gold continued the momentum of the previous shock rise, close to the 50 average $1,924. The daily chart MACD red momentum column remains weak, with the KDJ random index holding steady above the 50 level, indicating weak bullish momentum for gold, which is currently prone to volatility.
On the 4-hour chart, gold’s key 200-day moving average of $1913 is being negotiated, with the focus on whether the close can hold. The MACD red kinetic energy column gradually expanded, and the KDJ random index rebounded upward close to the overbought level, indicating that there is still room for further gains in the short term.
On daily charts, silver climbed further from its previous two days of gains to break above $25 for the day. The daily MACD red momentum column expanded slightly, with the KDJ stochastic holding steady above the 50 level, indicating a slight strengthening of bullish momentum for silver, or further volatile uptrend.
4-hour chart, silver prices continue to rise is now testing the 200-day moving average, to see whether it can stand the $25 level. The MACD red momentum column shifted to a gradual expansion and the KDJ random index rebounded upward near the overbought level, indicating that silver bullish momentum is strengthening and may move higher in the short term.
Fundamentals positive factors:
- Pelosi has said a compromise bailout plan has been drafted, hinting that a deal with the White House could be near. — Betting that a U.S. stimulus deal is good for gold.
- A spokesman for Pelosi said she and Treasury Secretary Mnuchin “continued to narrow their differences” in their discussions on Monday, with Pelosi hopeful of getting a “clear” message by the end of Tuesday on whether the corona-stimulus package is likely to be passed before the November 3 election. — Gold is still expected to benefit from the US financial rescue plan.
- The Leader of the Democratic Party In the United States Nancy Pelosi says a phone call with the Treasury Secretary Steven Mnuchin over the weekend made good progress. She was upbeat about the prospects for the talks and set Tuesday as a deadline for a deal on the rescue package before November’s presidential elections. Markets saw it as a sign of progress. — Positive developments in the stimulus package are positive for gold.
- Recently, European countries in the northern Hemisphere are facing severe pressure of epidemic prevention and control again. France has declared a public health emergency. A one-month curfew in nine major cities will affect nearly a third of the population. London is about to enter a second lockdown; Germany has introduced rules to try to reduce infection rates. — Risk aversion triggered by the renewed outbreak in Europe is bullish for gold.
Fundamentals negative factors:
- Senate Majority Leader mitch McConnell said Monday that a vote on the stimulus bill would be held Tuesday and Wednesday. About $500 billion, it would renew a small business loan program and provide more unemployment benefits, school aid and money for virus testing. Smaller stimulus packages are bad for gold.
- Senate Majority Leader Mitch McConnell said On Saturday that a vote on the smaller $500bn stimulus bill would be held on The 20th and 21st, with a separate vote on the Pay Protection Plan bill to bail out small and micro businesses. Smaller stimulus packages are bad for gold.
- McConnell on Thursday rejected more than $1.8 trillion in stimulus proposals, saying a smaller $500 billion plan was an appropriate response to the outbreak. The $500 billion stimulus package fell far short of market expectations, putting gold in the black.