Spot gold fluctuated in a narrow range between 1690 and 1700 on Monday and is now trying to break through the 1700 level, with attention on whether the close can hold.
Gold prices have come under pressure as countries begin to ease their blockade and hopes of an economic restart have boosted risk sentiment recently, though they gained renewed support last week when U.S. President Donald trump renewed his threat of tariffs, adding to market uncertainty.
US President Donald trump said Friday that raising tariffs is “certainly one of the options” as he considers how to retaliate against the spread of a novel coronavirus, Reuters reported. Mr Trump had made a similar statement the day before. As a result, the us stock market fell sharply on Friday.
“Given the current economic and financial uncertainty, trump’s china-bashing is the last thing the market needs,” said David Carter, chief investment officer at Lenox Wealth Advisors.
The stock market cliche of “selling stocks in May and never looking back” still holds true on the first trading day of may, as fears mounted as some us states began to loosen restrictions imposed during the outbreak.
“The market was very strong in April because they ignored the trough of the weak economy and focused on the fact that the stimulus will reignite growth,” Carter said. But the trough may be longer and deeper than many people expect.”
After the federal reserve spent trillions of dollars to support the U.S. economy during the outbreak, officials at the central bank are warning of lasting damage to U.S. labor and productivity if the recovery is not handled properly.
“We will gradually return to some degree of normal operations,” said Richard barkin, President of the Richmond fed, but “I am concerned about the landing site — how strong the economy will be when this is over.”
St. Louis fed presidents James bullard and Robert Steven Kaplan expressed similar concerns, saying the path out of the crisis could be slow and complex.
As for the outlook for gold, Everett Millman, precious metals specialist at Coins in Gainesville, said: “gold has a lot of room to go higher to make up for some of last week’s losses. Overall, the outlook for gold remains fairly positive. This is just a blip in the run-up to a new week of higher gold prices. I think gold will continue to move higher.”
Millman did not rule out the possibility that gold could rise to $1,800 in May. “It doesn’t take much to get to $1,800,” he says.
However, the precious metals expert also warned that on the downside, the volatility was much bigger. “Because gold has been above $1,500 for a long time. There are also significant downside risks. I don’t think there is a greater risk of gold falling in May. But if that happens, the range could be much wider, possibly all the way down to about $1,500.”
On the daily chart, the dollar index continued to rebound above the 99 level and is trying to break through the key 50-day moving average resistance. On the technical side, the MACD green momentum column is weak, the RSI index is hovering around 50, and the KDJ random index is further down towards the oversold level, with room for a rebound.
On the 4-hour chart, the dollar index has staged a strong rally and is now approaching the 20-point moving average resistance. MACD red kinetic energy column appears, KDJ random index to rise through the 50 level, or further higher.
On the daily chart, the gold price to maintain a narrow shock pattern, the current winding around the 20 day average, focus on the ability to stand 1700. MACD green kinetic energy column slightly expanded, KDJ random index hovering above 50, short or continue to oscillate.
On the 4-hour chart, gold is moving lower and lower, focusing on whether the previous low of $1669 will be broken, is below the main moving average level, the MACD red momentum column appears, the KDJ random index hovering around 50, short term direction is not clear.
fundamentals Positive factors :
- Statistics from real-time information and data update website worldometers show that as of 10:29 Beijing time on May 4, more than 3.56 million cases had been confirmed globally, with more than 248,000 deaths, including more than 1.18 million cases in the United States and more than 68,000 deaths.
- In an interview with the Wall Street journal, st. Louis federal reserve bank President James bullard said he is concerned about the potential for a recession if the shutdown lasts too long and the problems of restarting the economy are not handled well.
- U.S. President Donald trump said on Friday that he was considering retaliatory measures against China for its response to the novel coronavirus outbreak, and that raising tariffs on Chinese imports “is certainly an option.”
- The institute for supply management said its index of U.S. manufacturing activity fell to an 11-year low in April as a new coronavirus outbreak wrested havoc on supply chains, hinting at a deeper recession.
Fundamental negative factors:
- The Korean central news agency said Saturday that Kim jong UN, chairman of the workers’ party and state council of the democratic People’s Republic of Korea (DPRK), attended the completion ceremony of a fertilizer plant north of the capital, Pyongyang, in the first report of his public activities since April 11.
- British ministers will begin talks ona trade deal with the United States in the coming week, the sun reported Friday, as the government ordered formal talks to begin despite a novel coronavirus outbreak.
- Preliminary results from a trial of a coronavirus drug showed that at least 50 percent of patients who received five – and 10-day doses of the antiviral drug redesivir improved, and more than half were discharged within two weeks, gilead sciences said.