International spot gold traded in the $1,699 / oz area on Thursday, having fallen sharply to a low of $1,689.32 / oz in the previous session, but has since recovered but remains stuck near lows.
International spot gold opened at $1,726.13 an ounce, rising as high as $1,731.70, and dipped as low as $1,688.89 to settle at $1,697.48 an ounce, down $29.74, or 1.72 percent.
Gold futures for August delivery on COMEX fell $29.20, or 1.7 percent, to close down for a third straight session at $1,704.80 an ounce.
Gold fell more than 2 percent on Wednesday as investors largely ignored the impact of the U.S. protests on hopes that the economy would recover more quickly from a downturn driven by a Novel Coronavirus and improved risk sentiment.
Sentiment was also boosted by a smaller-than-expected decline in U.S. ADP payrolls in May, suggesting job losses are easing as companies resume work. Meanwhile, data from the Institute for Supply Management on Wednesday showed the service sector’s purchasing managers’ index also came off an 11-year low in May.
Lower interest rates reduce the opportunity cost of holding unyielding gold, which also tends to benefit from broader stimulus measures because it is often seen as a hedge against inflation and currency depreciation, analysts said.
Phil Streble, chief market strategist at Blue Line Futures in New York, said there is a strong risk appetite in the market right now and U.S. stocks are up.
Michael Hewson, chief market analyst at CMC Markets UK, said: “Overall, the market is pleased with the fact that, despite the bad data, conditions are likely to improve, which is taking the shine off gold.”
Mr. Hewson added that despite the decline, gold’s performance is expected to continue to be supported by a weaker dollar, street protests in the U.S., tensions between China and the U.S. and inflation fears stemming from the broad economic stimulus package.
The dollar, on the other hand, fell to a two-month low against a basket of currencies. Protests continued in CITIES across the US despite President Trump’s curfew and vows to call in the National Guard and even the US military, although violence was significantly reduced and risk aversion eased slightly.
The trump administration announced that Chinese passenger airlines would be banned from flying to the us from June 16, and the us embassies and consulates in China would cancel immigrant and non-immigrant visa bookings from June 8 to June 26.
In terms of coVID-19, statistics from Worldometers show that as of June 4, Beijing time, there have been more than 6.55 million confirmed coVID-19 cases and more than 380,000 deaths worldwide. In the United States, there have been more than 1.9 million confirmed coVID-19 cases and nearly 110,000 deaths.
Who Director-General Tedros Adhanom Ghebrezek said Wednesday that the project team will continue the treatment trial of hydroxychloroquine after assessing the data collected from the trial.
On the other hand, while COVID-19 is not fully contained, Ebola is back in Africa. The world Health Organization (WHO) director-general Tedros Adhanom Ghebrdin-Tedros said Thursday that 8 cases, including 4 deaths, have been detected in the new Ebola outbreak in Mbandaka, Democratic Republic of Congo (DRC). Who and its partners sent nearly 50 people to Mbandaka with 3,600 doses of vaccine and 2,000 testing kits. Local authorities are now sequencing the virus to see if it is linked to an Ebola outbreak there in 2018.
On the daily chart, the U.S. dollar index.DXY maintained its recent decline, but the MACD green momentum column contracted slightly, while the KDJ random index came under moderate pressure, indicating a respite in the dollar’s downward momentum and a possible attempt to bounce back at a lower level.
In the 4-hour chart, the USD index extended all the way to the low and then rebounded slightly, with the MACD red kinetic column looming and the KDJ random index turning higher, indicating that the USD may develop a short-term rebound from the low.
On the daily chart, gold has retreated in a volatile way, MACD green momentum column has expanded, and KDJ random index has turned sharply lower, indicating that gold’s downward momentum has strengthened and more retracement is coming.
On the 4-hour chart, gold prices still maintain a volatile downtrend, MACD green momentum unchanged, KDJ random index slightly flat, indicating that gold short-term momentum mixed, the next may maintain the pressure consolidation trend.
Fundamentals positive factors:
- According to statistics from Worldometers, as of June 4, Beijing time, there have been more than 6.55 million confirmed cases and more than 380,000 deaths of COVID-19 worldwide. In the United States, there have been more than 1.9 million confirmed coVID-19 cases and nearly 110,000 deaths.
- On June 3 local time, the US Department of Transportation (DOT) officially announced that it plans to ban Chinese airlines from passenger flights to the US because China does not allow them to provide services to and from China. The rules will take effect on June 16, local time, but could still be brought forward.
- The us embassies and consulates in China will cancel the immigrant and non-immigrant visa appointment on June 8, solstice and June 26. Due to the novel Coronavirus situation continues to change, the U.S. Embassy/Consulate in China has only a very limited number of staff and therefore cannot provide regular visa enquiry service.
- Business activity in the eurozone contracted sharply again in May and, despite signs that the worst is over, a return to growth could take months, a survey showed on Wednesday.
Fundamentals negative factors:
- Wednesday’s ADP employment report showed private employers cut another 2.76 million jobs in May, beating expectations of a 9 million drop. The figure was much better than expected, suggesting the worst may be over.
- The New York Times reported on Wednesday that the Trump administration has selected five companies most likely to make vaccines. Senior officials called it a key step in the White House’s effort to meet its pledge to begin universal vaccinations for Americans by the end of the year.
- Wednesday (June 3) According to the official microblog of Jilin Provincial Health Commission on June 3, the risk level of Shulan city has been adjusted from high to low risk according to the national coVID-19 epidemic classification standard.
- Chinese companies still bought at least three shipments of 180,000 tons of U.S. soybeans on Monday for shipment in October or November, Reuters reported. That combination boosted risk sentiment, sending money pouring out of dollar assets and into stocks.