Gold investment: witness history! -21 million is coming? Top fed official issues a stern warning! Gold can only go long for now?

On Friday, spot gold held on to overnight’s huge rally and continued to trade in a tight range around $1,720, staying on the sidelines ahead of the key U.S. payrolls report later in the day.

Gold rose more than $30, or nearly 2 percent, in a day of bullish activity, briefly breaking through the 1,720 mark before closing near $1,715 as U.S. jobless claims data added to recession fears.

Statistics from real-time information and data update website worldometers show that as of 11:01 Beijing time on May 8, there were more than 3.91 million confirmed covid-19 cases globally, with a total of 3,917,531 confirmed cases and 270,720 deaths of more than 270,000.

Among them, the total number of confirmed COVID 19 cases in the United States exceeded 1.29 million, with 1,292,623 cases, and the total number of deaths exceeded 76,000, with 76,928 cases.

New claims for state unemployment benefits fell for the fifth straight week to 3.169 million in the week ended May 2, labor department data showed on Thursday. Over the past seven weeks, the number of americans out of work has soared to 33 million.

“The data out there shows a lot of unemployment, and that’s still telling Investors that it’s probably a safe haven,” said Michael Matousek, chief trader at U.S. Global Investors in New York.

Other data released Thursday also highlighted the deepening economic crisis caused by a nationwide lockdown aimed at slowing the spread of novel coronavirus. Labour productivity fell at its fastest pace in more than four years in the first quarter, with the biggest drop in hours worked since 2009, data showed.

The dollar also came under pressure after the data, with the U.S. index falling below the key 100 level, and continued to fall on Friday.

“My sense is that this is taking profits from this week’s dollar rally ahead of Friday’s jobs report,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Stamford, Connecticut. “We’re just taking a breather and it’s a good time to take profits ahead of what is expected to be the worst jobs report on record.”

At 20:30 Beijing time on Friday, investors will be greeted by the us non-farm payrolls report for April, which may be the worst non-farm payrolls report on record. The U.S. economy is expected to shed 21.25 million jobs in April, while the unemployment rate is expected to surge to 16 percent, according to a respected media survey.

On a non-farm front, U.S. ADP employment fell by more than 20 million in April, well ahead of a record low of 708,000 (revised down to 742,000).

One analysis suggests that the total number of jobs lost in a single month is more than double the number lost during the great depression (1929-33). On a monthly basis, that is 24 times more than at the height of the financial crisis in 2008.

If the unemployment rate does rise to 16 percent this time, it would represent an 11.6 percentage point jump from 4.4 percent the previous month, and would surpass the 1.3 percentage point rise in 1949. A loss of 21 million jobs would exceed the previous record of 1.96 million jobs lost in 1945.

In fact, the number of jobs lost is likely to be three times the number lost in the two years following the 2008 financial crisis.

St. Louis fed President James bullard said this week’s April nonfarm data is likely to be the worst in U.S. history. “But it’s not a surprise because everyone is using unemployment insurance programs to deal with the outbreak.”

‘don’t reopen too quickly or you could pay a heavy price,’ fed chairman kashkari said Thursday. In fact, he notes, the employment report does not provide the clearest picture of job losses during a coronavirus pandemic.

“Friday’s bad report will actually underestimate the extent of the damage,” kashkari explained. “the reported unemployment rate could be as high as 17 percent, which is certainly a brutal number, but the real number could be as high as 24 percent. It’s devastating.”

Kashkari said a quick recovery from the novel coronavirus crisis was unlikely. He warned that the restart could be phased in and that a second wave of infections might require the resumption of containment measures.

As for gold, Chintan Karnani, chief market analyst at Insignia Consultants, said traders would “rather be long gold than short it” ahead of Friday’s U.S. non-farm payrolls data for April.

Technical analysis:

The dollar

On the daily chart, the dollar index on the day to fall back from the key 100 level, is still under pressure, close to the key 50 day average level. From the technical point of view, MACD green kinetic energy column weakened nearly disappeared, RSI index hovering around 50, KDJ random index to rise above the 50 level, the rebound power is not enough.

On the 4-hour chart, the dollar index has fallen sharply after hitting a high of 100.40 and is now testing its last moving average to support the 99.65 level. MACD green kinetic energy column began to expand, KDJ random index fell below the 50 level, short term may continue to fall.

gold

On the daily chart, gold is trading around $1,720, above its main moving average, after rallying more than $30 the previous day. MACD green kinetic energy column began to weaken, KDJ random index to rise above the 50 level, is expected to rise further.

On the four-hour chart, gold continued to rally after hitting a low of $1,681, briefly reaching a high of around $1,722, and is now above all averages. MACD red kinetic energy column slightly expanded, KDJ random index up close to the overbought level, focus on today’s non-farm farm data performance.

fundamentals Positive factors:

  1. According to statistics from real-time information and data update website worldometers, as of 11:01 Beijing time on May 8, there were more than 3.91 million confirmed cases of covid-19 globally, with a total of 3,917,531 confirmed cases and 270,720 deaths of more than 270,000.
  2. New claims for state unemployment benefits fell for the fifth straight week to 3.169 million in the week ended May 2, labor department data showed on Thursday. Over the past seven weeks, the number of americans out of work has soared to 33 million.
  3. Federal reserve governor kashkari said a quick economic recovery from the novel coronavirus crisis was unlikely. He warned that the restart could be phased in and that a second wave of infections might require the resumption of containment measures.

Us data released on Wednesday showed employment at ADP, known as “small non-farm”, fell by 20.236 million, the worst performance on record, and the total number of jobs lost in just one month was more than double the total lost during the great depression. The ADP report set the tone for Friday’s non-farm payrolls report, which is expected to show a 21.5 million decline in April.

Fundamental nefative factors:

  1. President Trump and vice president pence tested negative for a novel coronavirus, a White House spokesman said Thursday.
  2. US President Donald Trump tweeted that the White House task force on the new pandemic response would work indefinitely, but that the new focus would be on security and restarting the economy.
  3. House Democrats are pushing a massive fifth round of novel coronavirus rescue legislation in what could be their most far-reaching effort yet to deal with the economic impact of a pandemic, with a multi-trillion-dollar stimulus package in the works. The cost could match or exceed the $2.2 trillion CARES act passed in March.
  4. Vice President Mike Pence said the White House is in discussions to disband the new outbreak task force and possibly transfer the response to FEMA.

Leave a Reply

Your email address will not be published. Required fields are marked *