Gold investment: “magic medicine” halo reappears! Data bomb attack today! Gold rally nearing the end?

Spot gold traded in a tight range around $1,710 on Thursday (April 30), with the focus on the European central bank’s decision and euro zone GDP. U.S. data and PCE data are also likely to cause volatility.

Gold staged a bottomed recovery last day and continued to rally after hitting a low of $1,695 before closing above the 1710 level as the market digested the news.

Wednesday’s Commerce Department report showed gross domestic product shrank at a 4.8 percent annual rate in the first quarter, the worst contraction since the great recession. However, hopes that the drug might work against the virus outweighed data concerns, hitting safe-haven demand, and pushing gold below the 1700 mark.

White House health adviser Anthony Fauci, an infectious disease expert, expressed optimism about the performance of the drug in treating covid-19.

Fauci said at a White House news conference on Wednesday that analysis of preliminary clinical trials showed “a clear, significant and positive role” in reducing recovery time for COVID 19 patients. Fauci said the progress was “really important” and the data “significant” for a number of reasons, and he compared the efficacy of redesivir to 1986, when “we didn’t have any drugs for HIV.”

Then came the federal reserve’s decision to keep its target range for the federal funds rate at ultra-low levels of zero to 0.25 per cent, and to warn that a new pandemic posed considerable risks to the us economic outlook.

Federal reserve chairman colin Powell said at a news conference that U.S. economic activity is likely to decline at an unprecedented rate in the second quarter. But Mr Powell also said the economy would rebound as restrictions were lifted and vowed the fed would continue to support the recovery.

During Mr Powell’s speech, gold pared its losses and continued to rally back above the 1700 mark.

“You’re seeing risk taking from the U.S. stock market,” said Michael Matousek, chief trader at u.s.global Investors. “I think there’s some profit-taking going on in gold right now, and a lot of people are adjusting their positions to get ready for the next rally.”

The World Bank says the gold market is up about 15% from last year’s average so far this year, and the bull run is nearing an end. The biggest immediate threat to the gold market, according to the bank, is the dollar. Risk aversion will continue to affect commodity markets, affecting both global supply and demand.

Technical analysis:

The dollar

On the daily chart, the usd index is trying to stabilize after 4 consecutive days of decline, and is currently trading around 99.55. From a technical perspective, the MACD green kinetic energy column is weak, the RSI index is hovering around 50, and the KDJ random index is further down below 50, with further downside space.

On the 4-hour chart, the dollar index is still in its previous downtrend and is now below all major moving averages. MACD green kinetic energy column steady, KDJ random index hovering below 50, downward kinetic energy is still strong.

gold

On the daily chart, gold remains in a tight range, still above its main moving average, and is focused on securing the 1700 level after briefly falling below it on two previous days. MACD green kinetic energy column preliminary appearance, KDJ random index hovering above 50, short or continue to shock.

On the 4 hour chart, gold continues to wind around the 50 day moving average, focus on the ability to hold this level, MACD green momentum column is very weak, KDJ random index is higher, indicating gold short term momentum is mixed, next expected to continue to maintain a narrow consolidation.

fundamentals Positive factors :

  1. According to statistics from real-time information and data update website world meters, as of 10:07 Beijing time on April 30, there were more than 3.21 million confirmed cases and more than 228,000 deaths worldwide, including more than 1.06 million confirmed cases and more than 61,000 deaths in the United States.
  2. The federal reserve kept interest rates near zero on Wednesday and reiterated its commitment to using “all tools” to support the U.S. economy, as the ongoing global coronavirus pandemic posed “significant risks” not only to the short-term outlook but also to the medium-term outlook.
  3. The U.S. Commerce Department reported on Wednesday that gross domestic product shrank at a 4.8 percent annual rate in the first quarter, the worst contraction since the great recession.
  4. A car bomb exploded in the Turkish-controlled Afrin region of northern Syria on Monday afternoon, killing and wounding dozens of people. The Syrian state news agency said the attack took place in a market in the city of Afrin when an explosive device was placed in an oil tanker truck and detonated, killing and wounding many people.

Fundamental negative factors:

  1. Preliminary results from a trial of a coronavirus drug show that at least 50 percent of patients who received five – and 10-day doses of the antiviral drug redesivir improved, and more than half were discharged within two weeks, gilead sciences said.
  2. As the global outbreak eases, governments from Italy to New Zealand have announced a relaxation of restrictions, and businesses in more parts of the United States will reopen.

3, 19 outbreak in 27 COVID – press conference, New York state governor Cuomo said that at present the state COVID – 19 in the number of hospitalized patients in stable level, but haven’t reached the ideal level of the began to decline, and on the death toll, last weekend two days, the state of New York COVID – 19 one-day new death cases of 367 cases and 337 cases respectively, the decline in Numbers, but still huge total. Cuomo said Sunday that the state plans to reopen the economy in stages.

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