International spot gold was trading at $1, 538.45 an ounce in early Asian trading on Tuesday. Affected by the market risk aversion, the last session of the gold price retreated to the negative line to close down. Gold extended its slide through the $1,540 barrier, hitting an intraday low of $1,535.79 an ounce and falling as much as $13 since the day’s high, as the risk aversion cooled further on news that the United States had withdrawn its designation of China as a “currency manipulator.”
The US Treasury officially dropped its decision to label China a currency manipulator last year on Monday, in what was seen as another sign of a thaw in us-china relations.
“The Treasury has decided that China should no longer be listed as a currency manipulator at this time,” the Treasury said in its semi-annual report on currency intervention.
The U.S. Treasury said the real dollar is still 8 percent above its 20-year average and continued dollar strength could exacerbate persistent trade and current account imbalances. The dollar’s continued strength is “worrying”, based on the international monetary fund’s judgment that it is “overvalued” on a basis of real efficiency.
Market analysts said risk aversion had fallen further after the US dropped its designation of China as a currency manipulator. That, combined with a looming trade deal between the U.S. and China and signs of a thaw in tensions in the Middle East, has lifted risk sentiment, dampening safe-haven demand for gold.
On the daily chart, the dollar index briefly settled into a tight range, the MACD red momentum column expanded, and the KDJ random index moved higher, indicating that the dollar maintained its upward momentum and that a rally was still possible.
On the 4-hour chart, the dollar index temporarily settled in a narrow range, with the MACD green kinetic energy column unchanged and the KDJ random index continuing to come under pressure, indicating that the dollar may continue to consolidate in the short term.
On the daily chart, gold continued to retreat, with the MACD red momentum column narrowing and the KDJ random index sharply lower, a trend of gold retracement momentum strengthening, followed by or continue to extend the decline.
As shown in the 4-hour chart, gold price remains under pressure, MACD green momentum column expands, and KDJ random index continues to decline, indicating that gold will continue to be under pressure in the short term.
Fundamental negative factors:
1. The US Treasury Department on Monday (January 13) released its semi-annual report on exchange rate policy, lifting its designation of China as a “currency manipulator”. The report also said continued dollar strength was “worrisome” on the basis that the IMF judged the dollar to be “overvalued” on a basis of real efficiency.
2. According to fox news on Monday, U.S. Treasury Secretary Steven Munchin said trade talks between the United States and China will enter phase two.
White House national security adviser Robert O ‘Brien told Axios on Monday that Washington wants to get talks with Pyongyang “back on track” and implement north Korean leader Kim Jong-un’s “commitment” to the denuclearization of the Korean peninsula.
At the invitation of the us side, Liu he, a member of the political bureau of the communist party of China central committee, vice-premier of the state council and Chinese leader of the comprehensive economic dialogue, will lead a delegation to Washington from January 13 to 15 to sign the first phase of the economic and trade agreement with the US side, said Gao Feng, spokesman of the ministry of commerce, at a regular briefing on the afternoon of September 9. The two teams are in close communication on specific arrangements for the signing of the agreement.
Fundamentals favorable factors:
The federal deficit totaled $1.02 trillion in the 12 months to December, surpassing $1 trillion for the first time, according to data released by the U.S. Treasury on Monday.
The Iranian government will prosecute US President Donald Trump for the assassination of Omar Suleiman, the country’s top judicial official said on Monday, Russian media reported.
3. Attorney general Barr said Monday that trump clearly has the right to “do what he did” with Suleiman. Suleimani was a “legitimate military target” and the attack was “a legitimate act of self-defense.
Iran’s foreign ministry has strongly warned Britain to avoid making “new mistakes” after the British ambassador to Iran was briefly detained in Tehran for taking part in an illegal assembly.