International spot gold traded at $1,697 an ounce in Asian trading on Tuesday, after a moderate and volatile rally in the previous session. The current session so far, gold continued to maintain a volatile upward trend, the day’s highest hit $1704.73 an ounce.
Spot gold rose as high as $1,700.40 an ounce at $1,684.39 an ounce in early Asian trading, and dipped as low as $1,677.03, up 12.39 dollars, or 0.74 percent, to settle at $1,697.62 an ounce.
Meanwhile, COMEX gold futures for August delivery ended up 1.3 percent at $1,705.10 an ounce.
Want to drive by restart recovery, U.S. stocks closed higher on Monday, the nasdaq 9900 for the first time in history, a plate and its record closing, in the first three major U.S. stock indexes to confirm a new bull market, the dollar suffered a decline in profits, and commodity currencies rise, gold for bargain hunting, finally closed at slightly below the 1700 mark.
“Optimism about a global economic restart and possible confirmation that the U.S. economy will have a V-shaped recovery in the second half of the year drove Monday’s move,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
Daniel Ghali, commodities strategist at TD Securities, said: “The Fed will continue its dovish policy and they will continue to hold down real interest rates, which have been the main driver of gold buying over the past few months.” He added that the macro impact would continue to support gold prices.
“Gold’s rise is technical,” said Saxo Bank analyst Ole Hansen. Gold’s fall below $1,700 on Friday has again attracted some demand from investors who have been sitting on the sidelines, waiting for a correction.”
The Us Federal Reserve has not been idle amid rising hopes of an economic recovery. On Monday June 8th the Federal Reserve further expanded its Main Street lending programme, reducing the minimum loan to $250,000 and raising the limit to $300m. The Fed also gives borrowers five years to make payments, with no penalties for the first two years.
The $600 billion ‘Main Street’ loan program is part of the federal government’s unprecedented stimulus package aimed at helping small and medium-sized businesses, but it is far from certain they will press for loans.
And some Banks worry about the balance-sheet risks of participating. Paul Merski, executive vice President of the Independent Community Banks Association, said small Banks had “very limited interest” in the program until Monday, but the last-minute change announced by the Fed on Monday would “help” address some concerns.
Analysts at TD Securities said the Fed’s monetary policy decision later this week is expected to support gold to regain its footing above $1,700 an ounce. The reason is that the Fed will maintain its accommodative tone in policy resolution language and will also release more liquidity for small and medium enterprises, which will further pressure the DOLLAR index and further highlight the value of gold as a hedge against inflation.
Therefore, td securities also points out that although the recent gold price is down slightly compared with the previous seven and a half years high, but the interim head has not really appear, over time, there is still a broken record on and near record highs, the reason is the release of a large number of monetary liquidity is bound to quite a part into the precious metals market.
On the daily chart, the U.S. dollar index continued its downward trend, with the MACD green momentum slightly narrowing and the KDJ random index slightly flat, indicating a respite from downward momentum, but the overall weakness remained unchanged.
In the 4-hour chart, the DOLLAR index traded in a narrow range at its low, the MACD red momentum column remained unchanged, and the KDJ random index was on the downside overall, indicating that short-term momentum of the DOLLAR is still weak, and the dollar may continue to struggle in low trading.
On the daily chart, gold maintained a volatile retracement trend, breaking the 20-day moving average and temporarily supporting the 60-day moving average. The MACD green momentum column held steady, and the KDJ random index was slightly flat, indicating that gold’s downward momentum still exists, and the coming stocks will continue to maintain the retracement trend.
In the 4-hour chart, gold rebounded from its low of $1670.42 / oz, with the MACD red column expanding and the KDJ random index rising, indicating that gold’s short-term rally momentum is stable and the coming rally will continue to expand.
Fundamentals positive factors:
- According to real-time statistics of Worldometers, novel Coronavirus confirmed more than 7,188,000 cases and 408,000 deaths worldwide. Nearly one third of these confirmed cases occurred in the United States, with more than 2.02 million confirmed cases and more than 110,000 deaths from novel Coronavirus in the United States. The number of countries with more than 100,000 confirmed cases worldwide has risen to 16.
- Although more restrictions have been lifted in all STATES and more Americans are going out to socialize or protest, novel Coronavirus case rates are on the rise in nearly half of all States. Nationally, coronavirus cases are on the rise in 22 states. In recent days, confirmed cases have declined in about 20 states and remained stable in eight. According to the latest count, the number of coVID-19 cases confirmed daily in California, Texas, Florida and Illinois now exceeds that in New York state, the original epicenter of the outbreak.
- “There will be 100 percent another novel Coronavirus bailout agreement,” said Paula Hassett, chair of the White House Council of Economic Advisers. The details of the next novel Coronavirus bailout will depend on economic data from now through July. Further stimulus would weaken the dollar and give precious metals a boost.
- According to the World Bank, the rapid and huge impact of the coVID-19 pandemic and the economic shutdown caused by containment measures have plunged the world economy into a severe contraction. The world Bank estimates that the global economy will contract 5.2 per cent this year, making it the deepest recession since the second world war, with the largest number of economies seeing output per head fall since 1870.
- During the who’s regular briefing on COVID-19, Ryan, head of WHO’s Health emergency programme, said that with the exception of some countries from Mexico to Chile, Latin America is showing a very worrying growth pattern, and central and South America is now facing the most complex situation in the world.
Fundamentals negative factors:
- On June 8, local time, the Pentagon announced the lifting of the travel ban on five countries and 39 U.S. states. Five are Bahrain, Belgium, Germany, Japan and the United Kingdom. The Pentagon said all 44 countries and the US had “met the conditions for lifting travel restrictions”. California, Florida and North Carolina are among the states not yet eligible to lift travel restrictions.
“Big day for the stock market, smart money and the world know we’re headed in the right direction, and jobs are coming back fast,” U.S. President Donald Trump tweeted On June 8. Next year will be our greatest ever!”
New York City will reopen on Monday. The death toll in New York City, which had been enforcing home orders for 78 consecutive days, exceeded all but six countries. New York City, the largest and most densely populated city in the United States, once the epicenter of the outbreak, on Monday entered the first phase of its reopening plan to allow nonessential workers in construction and manufacturing to return to work and retail stores to provide pickup services on the roadside or in stores.
Last Friday’s (June 5) nonfarm payrolls data from the LABOR Department surprised the market. U.S. nonfarm payrolls unexpectedly jumped 2.509 million in May, the biggest monthly gain in U.S. history since at least 1939, with markets expecting an 8 million drop. The unemployment rate fell to 13.3% from 14.7% in April.