Gold investment: outbreak brings headwinds to the global economy! Bulls get ready for gold to break 1900 this year!

International spot gold traded at $1,640.50 an ounce in early Asian trading on Wednesday. Earlier, gold extended a choppy slide to a low of $1,634.30 an ounce before recovering from that point and maintaining a modest rally.

The market is concerned about the outlook for economic growth as the new outbreak of pneumonia has begun to spread around the world. Goldman sachs cut its forecast for first-quarter GDP growth to 1.2% from 1.4%. Jan Hatzius, chief U.S. economist at Goldman sachs, said in a report that the risk is clearly tilted to the downside, except when public health emergencies are contained.

RBC wealth noted that while the dollar remains strong, U.S. equity weakness and the IMF’s downgrading of its economic outlook for the full year will sustain gold’s bullish performance this year, which is expected to hit the 1700 mark soon.

Everett Millman, a precious metals analyst at Gainesville Coins, told CNN business that the outbreak is a headwind for global economic growth, a melody that could force central Banks into more stimulus.

Millman said he expects gold to break above the 1,800 mark later this year and then above the $1,900 level.

As for the epidemic situation, according to the national health and fitness commission, on February 25, the 31 provinces (autonomous regions and municipalities directly under the central government) and the xinjiang production and construction corps reported 406 new confirmed cases of coronary pneumonia, 52 new deaths (52 in hubei) and 439 new suspected cases. A total of 78,064 confirmed cases and 2,491 suspected cases have been reported.

At the same time, there were 401 new confirmed cases in hubei (370 in wuhan), 2,058 new cured and discharged cases (1,456 in wuhan), 52 new deaths (42 in wuhan), 41,660 confirmed cases (33,563 in wuhan) and 8,326 severe cases (7,355 in wuhan).

Technical analysis:

The dollar

On the daily chart, the dollar index moved higher and continued to retreat. Technically, the MACD green kinetic energy column slightly expanded, the KDJ random index further lower, indicating the dollar downward momentum to strengthen, the incoming materials further expand retracement.

On the 4-hour chart, the dollar index maintained a moderate pullback trend, with the MACD green momentum column narrowing slightly, and the KDJ random index moving slightly up, indicating a pause in the dollar’s short-term downside momentum followed by a small rebound from the low.

gold

On the daily chart, gold has retreated from multi-year highs, the MACD red momentum column has narrowed, and the KDJ random index has continued to move lower, indicating stronger pullback momentum, followed by or continued to expand pullback.

As shown in the 4-hour chart, the gold price shows a trend of concussion retracement, the MACD green kinetic energy column continues to expand, and the KDJ random index is under mild pressure, indicating that the short-term downward kinetic energy of gold still exists, and the incoming materials continue to carry out retracement.

Fundamentals favorable factors:

  1. According to the state health commission, on February 25, the 31 provinces (autonomous regions and municipalities directly under the central government) and the xinjiang production and construction corps reported 406 new confirmed cases of coronary pneumonia, 52 new deaths (52 in hubei) and 439 new suspected cases. A total of 78,064 confirmed cases and 2,491 suspected cases have been reported.
  2. On February 25, there were 401 new confirmed cases in hubei (370 in wuhan), 2,058 new cured and discharged cases (1,456 in wuhan), 52 new deaths (42 in wuhan), 41,660 confirmed cases (33,563 in wuhan), including 8,326 severe cases (7,355 in wuhan).
  3. The global outbreak of new coronary pneumonia seems to be accelerating, especially in countries such as Japan, South Korea, Iran and Italy, and more and more countries are beginning to have confirmed cases. In recent days, the outbreak of new coronavirus in the Middle East has been spreading. Not only has the number of confirmed cases and deaths soared in Iran. On February 24, bahrain, Kuwait, Iraq, Afghanistan and Oman announced their first confirmed cases of new coronavirus in their countries. As of 25 February, the number of countries in the Middle East with new confirmed cases of coronary pneumonia had risen to nine.
  4. The world health organization (WHO) said on February 24 that the outbreak of the coronavirus could still be defeated and that it was too early to declare the virus’s uncontrolled global spread.

Fundamental negative factors:

  1. Human trials of a possible new coronavirus vaccine are expected to begin within six weeks, U.S. health officials announced Tuesday. Some analysts believe that this good news or gold late sharp decline behind the reason.
  2. On February 25, he zhimin, deputy director of the state intellectual property office, said that radesivir has not been approved for listing in any country in the world, and radesivir is still in the clinical stage. There have been reports in the United States of initial results in the treatment of new coronary pneumonia. We have officially started clinical trials of the drug in a number of hospitals in wuhan, and announced the results of clinical trials on April 27.

3. New claims for state unemployment benefits rose 4,000 to a seasonally adjusted 210,000 for the week ended Feb. 15, the labor department said on Feb. 20, in line with expectations. That suggests continued strength in the labor market could help support the economy amid the risk of coronavirus and weak business investment.

4. The Philadelphia fed’s manufacturing index jumped to 36.7 in February from 17.0 in January, the highest level since February 2017, the fed said on February 20. Separately, the Philadelphia fed’s index of new manufacturing orders in February was at its highest level since May 2018.

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