Gold investment: not enough plus! Trump will sign nearly $500 billion more stimulus bill on Friday! The gold rally just started?

International spot gold was at $1,724.50 an ounce in Asian trading on Friday. In the previous session, gold rose to a high of $1,738.60 an ounce in volatile trading, then retreated from that point, and now continues to maintain the trend of correction, accelerating to a low of $1,721.10 an ounce on the day.

International spot gold opened at $1,712.31 an ounce, rose as high as $1,738.27 an ounce, and dipped as low as $1,704.93 to close at $1,730.50, up $16.02, or 0.93 percent.

Meanwhile, COMEX gold futures for June delivery closed up $7.10 at $1,755.40 an ounce, after hitting an intraday high of $1,751.60.

Gold rose nearly 1 percent on Thursday, hitting a fresh more than one-week high of $1,738.60 an ounce, buoyed by expectations of more U.S. stimulus measures and a surge in U.S. jobless claims in recent weeks, as risk aversion surged again.

The shutdown imposed by the us government to stem the spread of the new outbreak has taken its toll on the world’s largest economy and its Labour market.

Members of the U.S. house of representatives gathered in Washington on Thursday to pass a new $484 billion pandemic relief bill, bringing the total approval to an unprecedented nearly $3 trillion and sending it to President Donald trump for signature. According to the latest news, trump is expected to sign the economic stimulus bill aimed at novel coronavirus at noon local time on Friday.

Meanwhile, the federal reserve is now considering buying state and local debt. According to the Wall Street journal, the fed is considering expanding the main street lending program to include nonprofit organizations and plans to expand the municipal lending program to more local governments.

In addition, it was reported that the United States issued guidelines restricting the issuance of outbreak relief loans to large companies.

Gold, on the other hand, has tended to benefit from broad stimulus measures by central Banks and governments because it is often seen as a hedge against inflation and currency depreciation, giving it a lift.

At the same time, initial claims for unemployment benefits surged as a coronavirus shut down businesses nationwide. Initial claims for state unemployment benefits totaled 4.427 million last week, the labor department said on Thursday, compared with an expected 4.2 million. The previous reading was revised down to 5.237,000 from 5.245,000.

The number of americans filing new claims for jobless benefits fell for a third straight week last week, but the number of americans collecting jobless benefits for the fifth week was nearly 26.5 million, the worst decline in the U.S. labor market since the great depression. Assuming that all jobless claims are counted as unemployed, the latest data may reflect an unemployment rate of about 20 percent in April, double the 10 percent peak seen after the 2009 recession.

“With roughly 20 million initial claims in the last four weeks, we continue to expect non-farm payrolls to fall by more than 20 million in April,” said economist Heidi Chung.

Chung also expects the unemployment rate to approach 20 percent in the next two months.

David Meger, director of metals trading at High Ridge Futures, said gold was supported by continued stimulus policies from central Banks around the world, especially in the United States, where nearly $500 billion in new stimulus legislation is expected to be signed today.

Peter Schiff, chief executive of Euro Pacific Capital, a prominent gold bull, believes gold’s rally has only just begun. Schiff predicts that the next few years will see gold soar “to the moon” and bitcoin “fall back to earth.” In a tweet on April 11, schiff wrote that in the past few years, bitcoin hoarders have made fun of gold investors because bitcoin’s rise has far outpaced gold’s. But over the next few years, those roles will be reversed, not because gold is outperforming bitcoin, but because gold will fly to the moon and bitcoin will fall back to earth.

Lejun James Shao said: “from the daily chart, the dollar is likely to continue to move higher this week, which will weigh on gold prices. However, I expect strong support in the $1,600 – $1,650 range and it is unlikely to fall below $1,600. “The long-term trend for gold is still bullish and the medium to long term target of $2,000 is realistic, but it will take some time to reach that level and I expect gold to reach that target next year.”

Technical analysis:

The dollar

On the daily chart, the dollar index continued the recent rebound trend, the MACD red momentum column expanded, the KDJ random index further higher, indicating the dollar upward momentum to strengthen, the next expected to further extend the rebound.

On the 4 hour chart, the dollar index held the shock upward trend, MACD red kinetic energy column unchanged, but the KDJ random index turned slightly higher, indicating that the dollar may continue to move higher short – term shock.

gold

On the daily chart, gold prices maintained a volatile rally, the MACD red momentum column slightly narrowed, but the KDJ random index moderately higher, indicating gold momentum mixed, then may be in a period of volatile consolidation.

On the 4-hour chart, gold prices rose slightly after the fall, the MACD red kinetic energy column slightly narrowed, the KDJ random index turned to pressure, indicating that gold short – term correction may be launched.

fundamentals Positive factors :

  1. Worldometers world real-time statistics show that as of 9:57 Beijing time on April 24, the global covid-19 cumulative confirmed cases reached 2,718,699, cumulative deaths reached 190,654 and cumulative cures reached 745,620. The United States had the highest number of confirmed COVID 19 cases in the world, with 880,204 cases, 49,845 deaths and 85,922 cures.
  2. Members of the U.S. house of representatives, meeting in Washington on Thursday, voted to pass a $484 billion novel coronavirus relief bill, including $310 billion for a payroll protection plan (PPP). That brings the total approved for the crisis to an unprecedented nearly $3 trillion. The bill will be sent to President trump for signature.
  3. Data from the labor department on Thursday showed new claims for state unemployment benefits totaled 4.427 million last week, compared with expectations of 4.2 million. The previous reading was revised down to 5.237,000 from 5.245,000. Adding in the four previous reports, the number of americans claiming unemployment benefits in the past five weeks was 26.45 million. That’s more than the 24.442 million nonfarm jobs created since November 2009, when the economy began adding jobs again after the great recession. Assuming that all jobless claims are counted as unemployed, the latest data may reflect an unemployment rate of about 20 percent in April, double the 10 percent peak seen after the 2009 recession.
  4. This week US President Donald trump tweeted: “I have directed the us navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea.” A few days earlier, the U.S. defense department said that more than a dozen Iranian islamic revolutionary guard corps navy ships had carried out “dangerous and provocative” actions in the Persian gulf near U.S. navy and coast guard ships.

Fundamental negative factors:

  1. The head of the U.S. centers for disease control and prevention is warning that the worst of the coronavirus pandemic may be yet to come. “Next winter, this virus is likely to strike our country more difficult than the one we just had,” Robert Redfield, the C.D.C. director, told the Washington Post on Tuesday.
  2. According to statistics released by the Italian civil protection department on October 22, there are 107,699 new crown patients in Italy, 10 fewer than the previous day, and the third consecutive day of decline. A total of 54,543 cases were cured, 2,943 more than the previous day and the number of cases cured in a single day reached a new high since the outbreak began. As of Tuesday, the total number of confirmed cases in Italy was 187,327, 3,370 more than the previous day. The total number of deaths was 25,085, 437 more than the previous day. Of the existing patients, 81,510 were isolated at home, accounting for 75.7% of the total, 23,805 received general treatment in hospitals, and 2,384 received treatment in intensive care units. There were 87 fewer cases of severe illness and 329 fewer cases of general treatment than the previous day, and the decline continued.
  3. The first novel coronavirus vaccine was approved to enter clinical trials by the German federal institute of vaccines and biologicals Wednesday. In the first phase of the trial, 200 healthy volunteers between the ages of 18 and 55 will be given a slightly modified version of the vaccine, the institute said in a statement on the same day. The second phase will vaccinate other volunteers in the same age group, including vulnerable people.
  4. President Trump said on Tuesday that the hospital ship Comfort, deployed in New York, would leave the city “in preparation for the next mission.” The comfort is being used to provide emergency assistance to health workers fighting the coronavirus. “There is light at the end of the tunnel,” Trump said of the COVID 19 outbreak. Last week, Mr. Trump said that none of the patients on board showed that New York City was recovering. “It’s a good thing they don’t need it. This is a good thing. I think it shows that New York is making progress.”

Leave a Reply

Your email address will not be published. Required fields are marked *