On Wednesday (May 20) Asian market, international spot gold maintained a volatile upward trend, the day’s highest hit 1751.08 dollars an ounce, now up about 0.3 percent, trading at 1749 dollars an ounce area.
The congressional budget office (CBO) released its bleak outlook for economic growth, the unemployment rate and the federal budget on Tuesday, predicting that jobs will be added later this year but that the overall downturn will last until 2021.
In its latest forecast, the CBO expects U.S. GDP to fall by 38% in the second quarter; There will be 26 million more americans out of work than at the end of 2019. The economy is expected to start recovering in the second half of 2020 and employment in the third quarter will “improve significantly” as fears about the outbreak abate and restrictions are eased elsewhere, but “continued social alienation will keep economic activity and the Labour market subdued for some time.” The congressional budget office thinks the unemployment rate will remain high for some time, falling to 8.6 percent by the end of 2021.
The forecast was roughly in line with Wall Street economists’ forecasts and slightly better than the Atlanta fed’s latest tracker. The Atlanta fed expects GDP to fall by about 42% in the second quarter.
If the outlook is correct, it would be the worst decline in the us economy.
The CBO also warned that economic activity was falling so fast that the depth of the recession remained uncertain and spending data were still preliminary and incomplete.
The CBO expects a steady decline from there, and warns that the recovery will be long in coming.
As the United States tries to restart its economy from the “throes” of the epidemic, it faces a series of obstacles and a long road to recovery. If the U.S. economy continues to struggle, risk aversion will spread and gold may remain the gold of choice for investors, leading to an even bigger rally.
On the daily chart, the U.S. dollar index maintained the trend of retreat, MACD green kinetic energy column unchanged, KDJ random index further sharply lower, indicating that short dollar momentum is still strengthening, then the U.S. dollar may continue to expand its decline.
The 4-hour chart shows the U.S. dollar index (dxy) trading in a narrow range after a volatile fall, while the MACD green column narrowed and the KDJ random index turned higher, indicating the dollar may struggle to rebound from its low in the near term.
On the daily chart, the gold price held steady, the MACD red kinetic energy column slightly expanded, the KDJ random index slightly higher, indicating gold upward momentum strengthening, next to continue to talk about the expansion of the recent rise space.
On the 4-hour chart, gold also started a mild rebound, MACD green kinetic energy column slightly narrowed, KDJ random index turned higher, indicating that gold may continue to rebound in the short term.
Fundamental positive factors:
- Worldometers world real-time statistics show that as of May 20, Beijing time, the global total number of confirmed covid-19 cases has exceeded 4.98 million, reaching 4982,057, and the total number of deaths has exceeded 324,000, reaching 324,489. The United States has the highest number of confirmed covid-19 cases in the world, with more than 1.57 million cases and 157,063 cases, and more than 93,000 deaths and 93,500 cases.
- President Donald trump on Tuesday announced rules for a $19 billion U.S. farm aid program that will allow farmers to begin filing applications next week. The usda has announced that farmers who suffer a price loss of 5 percent or more can receive direct payments of up to $250,000 each.
- Federal reserve chairman colin Powell and Treasury secretary Steven mnuchin appeared before the senate banking committee on Tuesday, and both sides signaled more easing. Mr Powell said he was “prepared to take further stimulus action if necessary”. Mr. Mnuchin said the government was “fully prepared to take the losses” and provide relief to businesses hit by the covid-19 outbreak.
- New home starts fell an annualized 30.2 percent in April, while building permits fell 20.8 percent in April, according to data released on Tuesday. The impact of the epidemic on the U.S. housing market and the economy has made this what should have been a very good year for the U.S. housing market, but now everything is full of uncertainty.
Fundamental negative factors:
- 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.
- Us biotech company Moderna says that 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.
- The announcement by European countries that they would lift travel restrictions in the schengen area and agree to set up a 500 billion euro recovery fund strengthened market expectations for the unlocking of advanced economies.
- US President Donald trump says it’s good to see that America is getting back on track, that America needs sports to lift its spirits, and that hopefully the stadiums will fill up again. From an economic point of view, 2020 is going to be a great year.