Spot gold, which had been trading around $1,710 in Asian trading on Wednesday as it tried to rebound from the previous day’s sharp sell-off, appeared to return to cautious mode on the day.
Gold prices were hit hard last week, falling as low as $1,708 from a high of around $1,735 before edging closer to $1,710 as major economies further eased restrictions related to novel coronavirus, sparking hopes of an economic recovery and boosting risk appetite.
Worldometers world real-time statistics show that as of 11:01 Beijing time on May 27, the global total number of confirmed covid-19 cases exceeded 5.68 million, reaching 5,684,795, and the total number of deaths exceeded 350,000, reaching 352,225.
Among them, the United States has more than 1.72 million confirmed cases of covid-19, or 1,725,275, and more than 100,000 deaths, or 100,572. Both confirmed cases and deaths are the largest in the world.
U.S. stocks opened higher after the holiday break, with the s&p 500 index directly above the 3000 integer mark and the dow briefly above the 25,000 mark, as the vaccine development and economic restarts in Europe and the United States continued to lift investors’ risk appetite.
US President Donald trump tweeted shortly after learning of the stock rally, saying, “us stocks are soaring, the dow is over 25,000, states should open as soon as possible, America’s transition to greatness has begun ahead of time. Despite some ups and downs, next year will be the best ever.
However, the s&p 500 failed to hold its key psychological level at 3,000. At the close, the dow Jones industrial average was up 2.17% at 24,995.11. The s&p 500 gained 1.23% to 2,991.77. The nasdaq rose 0.17 percent, or 0.17 percent, to 9,340.22.
Gold jumped back to $1,710 as U.S. stocks plunged late in the day on fears of sanctions imposed by U.S. President Donald trump.
At present, the “Hong Kong version of the national security law” has attracted international attention. Mr Trump said on Tuesday that the us was preparing a strong response to China’s version of national security legislation in Hong Kong, to be announced by the weekend.
Asked at the White House if he would impose sanctions on China, Mr Trump said: “we are doing something right now. I think you’ll find it interesting, but I’m not going to talk about it today.” He added that the announcement would be made by the end of the week and described it as a “very strong” move.
White House spokeswoman Kayleigh McEnany said on the same day that trump was unhappy with Beijing’s plans to implement a “Hong Kong version of the national security law.” It is hard to see how Hong Kong would remain a financial centre if China took over.
Shawn Snyder, head of investment strategy at citi’s personal wealth management, was skeptical about the room for further market gains ahead of the November U.S. presidential election and heightened tensions between the United States and China.
Citibank is once again bullish on gold. The bank thinks gold could hit the $2,000 level. “We think the gold price will move up slowly, generally maintaining support in the $1,600 to $1,700 / oz area and not moving up to the $1850 to $1950 / oz area anytime soon. The next resistance is around $1,800 an ounce, with support below $1,682 to $1,720 an ounce.”
Metals Focus said as long as the gold market held above $1,700 an ounce, the market would remain long.
In gold trading, “investors are looking for new excitement to drive the market,” Carlo Alberto De Casa, chief analyst at ActivTrades, wrote in a report. The risk strategies the stock market has seen over the past few days have pulled gold prices down.”
“Only a break above $1,750 would have room for further gains, and a break below $1,725 would increase the likelihood of a re-test of $1,700 and a possible fall to $1,671 to $1,675, which is a strong support level,” he said.
On the daily chart, the U.S. dollar index on the day of heavy selling, once lost the 99 level, the end of the close above this level, focus on whether to hold the 100 moving average level. From a technical point of view, the MACD green kinetic energy column expanded slightly and the KDJ stochastic index approached oversold levels downwards, suggesting that short dollar momentum has increased, but downside space may be limited.
As you can see from the 4-hour chart, the dollar index has continued to fall from its high around 99.98 to 98.89, and is now trying to bounce back below its main moving average. The MACD green kinetic energy column began to contract and the KDJ stochastic gauge hit oversold levels, indicating dollar shorts were losing momentum and expected to stabilize and rebound.
On the daily chart, gold seems to be in a volatile downward trend from $1765, currently hovering around the 20-day moving average, to see if it can hold the 1700 mark. The MACD green column edged up and the KDJ stochastic index edged down toward oversold levels, suggesting gold bears are gaining momentum, but the decline could slow.
As you can see from the 4-hour chart, gold seems to be forming a series of falling highs and lows. If the gold price proves to have lost $1,708 and fallen below its 200-day moving average, it may face a heavier sell-off. The MACD green column continued to expand, and the KDJ stochastic index hit oversold levels down, indicating gold shorts were strengthening, but could then stabilize.
Fundamental positive factors:
- Worldometers world real-time statistics show that, as of 11:01 on May 27, Beijing time, the global total number of confirmed covid-19 cases exceeded 5.68 million, reaching 5,684,795, and the total number of deaths exceeded 350,000, reaching 352,225.
- The United States is preparing a strong response to China’s version of national security legislation in Hong Kong, which will be announced by the end of the week, trump said on Tuesday.
- White House spokeswoman Kayleigh McEnany said on the same day that trump was unhappy with Beijing’s plans to implement a “hong kong-style national security law.” It is hard to see how Hong Kong would remain a financial centre if China took over.
- Michael Ryan, head of who’s health emergencies programme, said it was a dangerous assumption to assume that the current decline reflected the natural seasonality of a disease and that the next danger point could be October or November. He stressed that if the virus is allowed to overtake us again and no system is in place to beat it, there is a risk of a second peak.
Fundamental negative factors:
- Novavax, the us biotechnology company, said on Monday that it had begun the first human study of its experimental coronavirus vaccine.
- Data released on Tuesday also boosted confidence that the U.S. economy has bottomed out as it reopened its markets. The consumer confidence index jumped to 86.6 from 85.7 in April, according to the conference board. Sales of new single-family homes in the us rose by 623,000 units last month, beating expectations of 490,000.
- U.S. President Donald trump says the stock market is surging and states should open up as soon as possible.
- The Japanese government on Monday lifted the country’s state of emergency and will decide on a second supplementary budget on Wednesday to help individuals and businesses hit by the outbreak.