Spot gold continued to trade in a tight range above the 1550 mark, hitting a low near $1545 overnight. The market is now focused on the us-Europe trade and the outbreak of pneumonia in Wuhan.
Gold continued to slide last week, falling from above $1,568 to a low near $1,545 and as much as more than $20 on the day, even as China’s new coronavirus outbreak sparked a flight to safety.
U.S. President Donald Trump on Tuesday expressed cautious optimism about trade talks with Europe but kept the threat of new tariffs on cars on the table. US President Donald Trump has said he will seriously consider imposing tariffs on cars imported from Europe if a fair deal is not reached. But he later said he wanted to reach a deal with the eu on tariffs on cars.
As for the epidemic situation in China, near the early morning of January 22, the national health commission issued an article saying that experts concluded that the case was mainly related to Wuhan and that there had been human-to-human transmission and infection among medical workers, with a certain extent of community transmission. The source of the new coronavirus infection has not yet been found, the transmission route of the epidemic has not yet been fully understood, there is the possibility of virus mutation, there is the risk of further spread of the epidemic.
“Gold has been doing pretty well for a while and we’re giving up some of those gains,” said Bart Melek, head of the commodity strategy at TD securities, in response to the continued pullback despite the risk aversion. He added that gold was likely to stay in a tight range around $1,550 for now.
“I haven’t heard anything to suggest that gold’s decline is some kind of structural, long-term fundamental development,” he added. This is more of a technical pullback.”
In the current trading session, the world health organization’s emergency team will meet in Geneva on Wednesday (January 22) to determine whether the outbreak of pneumonia in Wuhan should be designated as a “public health emergency of international concern,” keeping the market focused.
On the daily chart, the dollar index remains extremely range-bound, currently trading around 97.70, before bottoming out to close barely flat. In terms of technical indicators, the MACD red momentum column was basically stable, the RSI index was slightly above the 50 levels, and the KDJ index hit the overbought level.
On the four-hour chart, the dollar index rose sharply to around 97.73 after hitting a previous low of 97.08, before retreating slightly to briefly below the 50-session average and now back above all averages. From the technical indicators, the MACD red kinetic energy column gradually weakened, the RSI index traded slightly above 50, and the KD index rebounded upward from the level of 50.
On the daily chart, gold continued to come under a bit of pressure, trading just above 1550, before falling back to near $1545 at one point and briefly approaching the moving support of the 20-day moving average. In terms of technical indicators, the MACD green kinetic energy column gradually expanded, the RSI index approached the 50 levels downward, and the KD index rebounded from below the 50 levels.
On the 4-hour chart, gold fell sharply in the short term after hitting a high of $1,568 yesterday, briefly dropping below the key 100-session average of $1,549 and now winding around the 50-session average. From the technical indicators, the MACD red kinetic energy column expanded slightly, the RSI index was down from the level of 50, and the KD index was down to the level of 50.
Fundamentals favorable factors:
1.US President Donald Trump said on January 21 that he will seriously consider imposing tariffs on cars imported from Europe if a fair deal is not reached. But he later said he wanted to reach a deal with the eu on tariffs on cars. In addition, he threatened to impose a 100% tariff on French wine. The Commerce Department later confirmed that it had not issued the auto report, saying it would hamper “ongoing negotiations between Europe and the United States on auto tariffs.”
2. China has confirmed 324 new cases of coronavirus pneumonia in 14 provinces as of 7 am Tuesday, according to CCTV news. The national health commission has been working with relevant departments to prevent and control the outbreak of pneumonia caused by the new coronavirus.
3. The U.S. centers for disease control and prevention (CDC) said Tuesday that a Chinese tourist in Seattle has been confirmed as the country’s first case of the new coronavirus pneumonia.
4. On January 20, the international monetary fund (IMF) became less optimistic about global economic growth and warned that the outlook for the global economy remained weak with no clear sign of an inflection point. The IMF’s new managing director has warned that the global economy risks sliding back into a depression driven by inequality and turmoil in the financial sector.
Fundamental negative factors:
- The bank of Japan held monetary policy steady on Tuesday, raising its growth forecast slightly and signaling cautious optimism about the global economy, but said continuing risks meant it was too early to consider scaling back its massive stimulus program.
2.US President Donald Trump and his French counterpart Emmanuel Macron have agreed to continue negotiations on a digital tax until the end of the year, French diplomatic sources said on January 20. Mr. Trump has agreed to suspend tariffs until the OECD digital tax debate is over.
3.Harker said the U.S. economy is expected to grow 2 percent this year, with data showing the labor market doing fairly well and the economy looking “pretty good.”
4.U.S. housing starts rose to an annualized total of 1.608 million units in December, the highest since December 2006, and a monthly rate of 16.9 percent, the biggest monthly increase since October 2016.