International spot gold traded at $1,609.10 an ounce in early Asian trading on Thursday. Gold rose as high as $1612.82 an ounce earlier, but has since retreated and is still trading above the $1,600 mark.
Gold has held steady recently as a safe-haven asset has received a further boost from rising risk aversion following the outbreak of pneumonia.
Bob Haberkorn, senior market strategist at RJO Futures, said: “gold is above $1,600 and we’ve moved through that very quickly.” He added that questions about the extent of the impact of the outbreak provided sufficient support for gold prices.
Julius Baer analyst Carsten Menke said gold investors are keeping a close eye on developments as markets continue to worry about how long it will take for the impact of the new coronavirus outbreak on the global economy to dissipate, which is the main reason for gold prices.
Gold could be a way for investors to hedge against the downside as a record bull market continues and a coronavirus outbreak raises concerns about a possible slowdown in global economic growth, according to citi, the leading investment bank. The bank believes market jitters will drive investors into so-called safe haven assets, pushing gold to $2,000 an ounce over the next 12 to 24 months.
Philip Streible, chief market strategist at Blue Line futures, said the gold market is currently waiting for more stimulus to push prices higher, predicting that the furthest distance of gold’s short term horizon, once it hits 1620, will move to the 1650 level.
Colin Cieszynski, chief market strategist at SIA wealth management, thinks gold could be pushed into the 1670-80 region once it gets out of its new breakout.
Two people who contracted coronary pneumonia aboard the “diamond princess” cruise ship have died, NHK television reported Tuesday. The death is the first of its kind on the diamond princess cruise ship after contracting a new case of coronary pneumonia. So far, the number of new cases of coronary pneumonia in Japan has risen to three.
A total of 394 new confirmed cases, 114 new deaths (108 in hubei, one in hebei, Shanghai, fujian, shandong, yunnan and shaanxi) and 1,277 new suspected cases were reported in 31 provinces (autonomous regions and municipalities directly under the central government) and the xinjiang production and construction corps from 0:00 to 24:00 on February 19, according to the latest update from the national health and fitness commission.
On the same day, 1,779 new cases were cured and discharged from hospital, 25,318 close contacts were released from medical observation, and 113 cases of severe illness were reduced.
On the daily chart, the dollar index continued to hold its recent gains, hitting a high of 99.73 in the previous session. Technically, the MACD red kinetic energy column is slightly narrowed, while the KDJ random index is slightly under pressure, indicating a respite in the upward momentum of the dollar, which may be followed by a retreat from high pressure.
On the 4-hour chart, the dollar index also maintained gains, with the MACD red momentum column unchanged and the KDJ random index slightly tilted up, indicating that the short-term upward momentum of the dollar remained unchanged, followed by or continued to maintain the upward trend.
On the daily chart, gold prices held steady and rebounded, with the MACD red momentum column continuing to expand, and the KDJ random index moving higher, indicating stronger upward momentum for gold and further gains in coming stocks.
As shown in the 4-hour chart, the gold price maintained a steady upward trend, with the MACD red kinetic energy column unchanged, while the KDJ random index was slightly under pressure, indicating that gold could maintain its upward trend in the short term, but may pause at a high level.
Fundamentals favorable factors:
1, on Thursday (February 20) according to hubei province WeiJianWei bulletin, as of 19 February 24, according to the 31 provinces (autonomous regions and municipalities directly under the central government) and the xinjiang production and construction corps, the existing 56303 cases of confirmed cases of 11864 patients with severe cases (), the cumulative cured cases, 16155 cases of hospital, the cumulative death cases, 2118 cases, has reported 74576 cases of confirmed cases, jiangxi, henan, yunnan subtract 1 case), the existing 4922 cases suspected cases. A total of 589,163 close contacts were traced, and 126,363 close contacts were still under medical observation.
2.On Tuesday, the us government announced major new sanctions against the Russian oil company Rosneft for helping the Venezuelan leader Nicolas Maduro circumvent us sanctions. The sanctions announced by the U.S. Treasury targeted Rosneft Trading SA, a subsidiary of Russian oil company Rosneft. The decision marks a significant escalation in U.S. President Donald trump’s campaign to pressure Mr. Maduro and a rare confrontation with Russian President vladimir putin.
3.Apple warned on Monday that it would struggle to meet its first-quarter revenue forecast as global public health events slowed production and weakened the demand outlook. Apple’s revenue warning boosted safe-haven demand for gold by weighing on risk sentiment as concerns grew about the economic impact of the new pneumonia.
4.The NAHB index of U.S. home prices, released on Tuesday, stood at 74 in February, compared with expectations and a previous reading of 75.
Fundamental negative factors:
1.U.S. housing starts fell less than expected in January and construction permits rose to a near 13-year high, according to a report on Wednesday, suggesting the housing market’s continued strength could help keep the longest economic expansion in history on track. The Commerce Department said it expected 1.425 million new homes to start last month at a seasonally adjusted annual rate of 1.667 million. Permits for construction surged 9.2 per cent in January to an annual rate of 1.551, 000 units, the highest since March 2007, with both single-family and multifamily building permits up.
2.The producer price index for final demand jumped 0.5 percent last month, the biggest gain since October 2018, after rising 0.2 percent in December, according to a separate report from the labor department on Wednesday. PPI rose 2.1 per cent in the 12 months to January, its biggest gain since may, compared with 1.3 per cent in December. Economists had forecast a 0.1 per cent month-on-month increase and a 1.6 per cent year-on-year rise.
3.Federal reserve minutes released in the early hours of Thursday showed policymakers were cautiously optimistic about keeping interest rates steady this year, even as they acknowledged the new risks posed by the outbreak.
4.The New York fed’s manufacturing index rose to 12.9 in February from 4.8 in January, beating analysts’ expectations of 5, according to data released on Tuesday.