Gold investment: short still in hair force! Why are institutions so betting that gold is heading for the $2,000 mark?

International spot gold was at $1708.60 an ounce in Asian trading on Friday. Gold started volatile declines on the day, hitting an intraday low of $1701.20 an ounce, and is still struggling around that low.

Gold prices fell after an earlier 1.3 percent rise as a slightly smaller number of U.S. workers filed new claims for jobless benefits last week and heightened expectations of an easing of restrictions ona U.S. novel coronavirus eased safe-haven demand.

Gold opened at $1,715.90 an ounce in early trading on Thursday, rising as high as $1,738.70 an ounce and dipping as low as $1,707.24 to close at $1,717.60, up $1.73, or 0.1%.

COMEX gold futures for June ended down 0.5 percent at $1,731.70 an ounce, down for the second day in a row.

Us data on Thursday showed 5.2 million americans filed new claims for jobless benefits last week, down from a revised 6.6 million in the previous week, but the total number of jobless claims in the past month topped 20 million.

President trump plans to announce new guidelines to restart the economy after a month-long blockade, despite fears among health experts, state governors and business leaders that the outbreak could return without more testing and arrangements.

David Meger, director of metals trading at High Ridge Futures in New York, said the pullback came as investors talked about how the government would restart the economy and risk aversion cooled. But gold remains fairly well supported by an environment of unprecedented monetary and fiscal stimulus by central banks and governments around the world.

The head of Newmont, the world’s largest gold producer, said gold prices could rise above $2,000 an ounce and remain high for the next five years as the global economy grapples with the effects of the coronavirus outbreak.

“In the longer term, the global economic stimulus will certainly support higher gold prices,” chief executive Tom Palmer said in a telephone interview on Thursday.

Technical analysis:

The dollar

On the daily chart, the dollar index rebounded from its lows, the MACD green momentum column was slightly narrowed, and the KDJ random index was slightly higher, indicating that the dollar’s upward momentum is still there but weak.

On the 4 hour chart, the dollar index after a slight fall, MACD red kinetic energy column slightly narrowed, KDJ random index turned lower, indicating that the dollar may continue to develop a period of retreat.

gold

On the daily chart, the gold price rose and then fell, the MACD red kinetic energy column narrowed, the KDJ random index was mildly lower, indicating a slight strengthening of gold retracement kinetic energy, which may be followed by further retracement.

On the 4-hour chart, gold continued the downward pressure trend since the peak, MACD green momentum column slightly expanded, KDJ random index further lower, indicating that gold will continue to fall under pressure short term.

fundamentals Positive factors:

  1. Worldometers world real-time statistics show that as of 09:59 Beijing time on April 17, the global total number of confirmed covid-19 cases reached 2,182,197, the total number of deaths reached 145,521, and the total number of cured cases reached 547,295. The United States had the highest number of confirmed COVID 19 cases in the world, with 677,570 cases, 34,617 deaths and 57,508 cures.
  2. Coronavirus and forced closures of businesses across the country are again fueling U.S. jobless claims. The number of americans applying for unemployment benefits reached 5.245m last week, according to a government report released on Thursday. Adding in the three initial claims reports from the labor department, U.S. jobless claims climbed to 2.02 million in the past four weeks. That is slightly lower than the 22.442 million nonfarm jobs added since November 2009. The U.S. economy began adding jobs again in November 2009 for the first time since the recession.
  3. The Philadelphia fed’s business conditions index fell to -56.6 on Thursday, touching its lowest level since July 1980, as economic activity in the region slumped this month.
  4. On Thursday, new housing starts for march were reported at 1.216 million units, compared with an expected 1.3 million, up from 1.59 million.
  5. U.S. retail sales fell a record in March as a forced shutdown to contain the spread of novel coronavirus crimped demand for a range of goods, leading to the biggest drop in consumer spending in decades. Retail sales fell 8.7% in March, the Commerce Department said Wednesday, the biggest drop since it began tracking the data in 1992, after a revised 0.4% decline in February. The figure was below expectations and the consensus forecast was for an 8 per cent fall.

Fundamental negative factors:

  1. US President Donald Trump on Thursday set out guidelines for a three-stage state-wide economic reboot, setting out testing standards states must meet and requiring the rapid provision of protective gear to reopen. The governors of each state can carry out the guidelines according to the conditions of their own state, rather than relying on the orders of the federal government. The guidelines, titled “open America again,” have not yet been officially released, and Mr. Trump has distributed documents to state governors.
  2. US President Donald Trump said on Wednesday that the us had passed the “peak” of the coronavirus outbreak. On Thursday he will discuss guidelines for reopening the United States. Now Trump has canceled plans to set up a new task force to revive the economy and instead has held a series of phone calls with business leaders, according to two sources.
  3. German chancellor Angela Merkel said on Wednesday that her country would begin easing restrictions on its economy from April 20. Shops under 800 square meters can be reopened if measures are taken to “keep them clean”.
  4. On Tuesday, China’s exports fell 6.6% in March from a year earlier, lower than economists’ forecasts of a 14% drop. Imports fell less than 1 percent from a year earlier, below economists’ forecasts of a 9.5 percent drop. Risk sentiment returned after better-than-expected economic data from China.

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