Gold investment: see again panic selling! The latest round of tensions between China and the US is worsening market sentiment. The gold price technical side is very bad!

Spot gold traded in a narrow range above $1,720 on Friday, peaking around $1,730, as concerns grew over the state of us-china relations.

U.S. stocks ended lower on Wall Street, while gold took profits and investors stayed on the sidelines as the latest bout of tensions between China and the U.S. raised doubts about a trade deal struck between the world’s two largest economies earlier this year.

Worldometers world real-time statistics show that as of 10:18 Beijing time on May 22, the global total number of confirmed covid-19 cases exceeded 5.19 million, reaching 5,194,210, and the total number of deaths exceeded 334,000, reaching 334,621.

Among them, the United States had more than 1.62 million confirmed cases of covid-19, or 1,620,902, and more than 96,000 deaths, or 96,354. Both confirmed cases and deaths were the highest in the world.

Now, hopes of an economic recovery are boosting stock markets as governments around the world begin to unwind epidemic containment measures. But worries about tensions between China and the U.S. outweighed hopes of an economic revival.

Relations between China and the United States have become increasingly tense recently. U.S. President Donald trump and other administration officials have insisted that China mishandled the initial weeks of the covid-19 outbreak.

On Wednesday, the U.S. Senate passed a foreign companies accountability act is further increased tensions between China and the United States, this bill is not directly called Chinese companies, but many Chinese companies may be prohibited in Washington don’t follow the regulation and auditing standards, can’t exchange in the United States or to raise money from U.S. investors. This may increase the risk of delisting. There were even reports on Thursday that Baidu might delist from the us to boost its valuation and list in Hong Kong.

The bill, sponsored by republican senator John Kennedy and democratic senator Chris Van Hollen, was passed unanimously. However, it must pass the house of representatives and be signed by President trump to become law.

In addition, the latest Chinese and U.S. moves on Hong Kong have raised questions about a trade deal struck between the world’s two largest economies earlier this year.

“It looks like China could be targeted for the upcoming election,” said Bob Shea, chief executive and co-chief investment officer of TrimTabs asset management. The White House has decided that attacking China would be more effective than saving a much-watered down first phase trade deal, because there is no bonus point in saving the deal.”

Major Wall Street indexes fell on Thursday as sentiment soured amid rising tensions between China and the United States and concerns about the speed of recovery from a novel coronavirus – led economic downturn. The VIX fear index briefly rose to 30 points during the session.

On Thursday, gold moved in line with U.S. stocks, as it did in March, when everything but the dollar was sold, including gold, as a sharp sell-off in stocks prompted investors to sell gold in exchange for cash or other market margin calls.

Phil Streble, chief market strategist at Blue Line Futures in Chicago, said: “the stock market is so overbought and there’s so much money going into the tech sector that once you start to get out of your position, there’s a kind of panic trading going on in the market. Gold will come under some pressure as people seek to liquidate their assets. But that won’t hurt gold badly. It’s just come down a little bit, that’s all.”

Technical analysis:

The dollar

On the daily chart, the dollar index on the basis of the previous day’s rise further, the current trading around 99.50, the overall winding around the 60 moving average. On the technical side, the MACD green kinetic energy column is gradually weakening, and the KDJ random index is trying to stabilize after falling below the 50 level, suggesting that short dollar momentum is starting to weaken, and then it is expected to stabilize and rebound.

As you can see from the 4-hour chart, the dollar index has rebounded since hitting a low of 99.00 and is now rising above its 20-day moving average, where there is still a lot of moving average resistance. MACD red kinetic energy column gradually expanded, KDJ stochastic index pulled close to the overbought level, indicating a strong dollar short-term rebound momentum.

gold

On the daily chart, the gold price is still maintaining a high consolidation trend, on the day of the collapse of the gold price extremely close to 20 daily average support, focus on whether to stand this level. MACD green kinetic energy column initially appeared, KDJ random index since the overbought level slightly downward direction, suggesting that gold short momentum appeared, or further lower.

On the four-hour chart, gold is still in the midst of a decline that began at $1,765, with the sharp drop in the previous session taking it past its key 50-session moving average and keeping an eye on whether short-term lows can form around $1,715. MACD green momentum held steady, while KDJ random fell below 50, indicating gold had a strong downward momentum or could come under further pressure.

Fundamental positive factors:

  1. Worldometers world real-time statistics show that, as of 10:18 on May 22, Beijing time, the global total number of confirmed covid-19 cases exceeded 5.19 million, reaching 5,194,210, and the total number of deaths exceeded 334,000, reaching 334,621.
  2. The United States has announced its intention to withdraw from the open skies treaty, which allows 35 countries, including Russia, to conduct unarmed surveillance flights over each other’s territory to ensure that they are not prepared to take military action. The trump administration has previously said that Russia has repeatedly violated the terms of the agreement.
  3. The U.S. senate on Wednesday passed a bill that could block some Chinese companies from listing on U.S. exchanges unless they comply with U.S. auditing and regulatory standards.
  4. The fed minutes reaffirmed their commitment to using all policy tools to support the economy. “Participants commented that, in addition to the significant short-term impact on economic activity, the economic impact of the pandemic created considerable uncertainty and posed considerable risks to economic activity in the medium term,” the minutes added.

Fundamental negative factors:

  1. U.S. President Donald trump says the federal reserve and Treasury departments still have “ammunition” in their arsenals to help an economy battered by a novel coronavirus pandemic, though he doubts new measures are necessary. In addition, he said, “we will not close our country” if the United States suffers a second wave of coronavirus infections.
  2. The growth of covid-19 in the United States has slowed down slightly recently, and many states in the United States have lifted epidemic prevention restrictions to varying degrees and restarted their economies. By May 20, local time, all states had entered the restart phase.
  3. As of Wednesday, every state in the United States will begin unwinding measures put in place weeks ago to contain the spread of the coronavirus, even as the daily rate of new cases continues to rise in some parts of the country. The last state to lift some restrictions is Connecticut, which will allow outdoor dining venues, offices, retail stores and malls, museums and zoos to reopen with restrictions on Wednesday.
  4. Us biotech company Moderna says the vaccine mrna-1273 for covid-19 is safe and well tolerated; The final phase of vaccine trials is expected to begin in July. Dynavax, an American biopharmaceutical company, followed with good news. A novel coronavirus vaccine trial could take place as early as July, the company said.

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