International spot gold was at $1709.80 an ounce in Asian trading on Thursday. During the day the gold price began to retreat, the previous session all the way up sharply, the final up to 1713.10 dollars an ounce, the session continued to fall, the lowest touched 1708.80 dollars an ounce.
International spot gold opened at $1,685.50 an ounce last session, rising as high as $1,718.29 an ounce and dipping as low as $1,679.20 to close at $1,714.48, up $28.58, or 1.7%.
Meanwhile, COMEX gold futures for June delivery ended up $50.50, or 3.0 percent, at $1,738.30 an ounce, the highest close since April 15, tracking a 40 percent gain in WTI crude futures as the dollar briefly weakened.
“It’s a perfect storm for gold,” said Michael Matousek, chief trader at U.S. Global Investors. “Gold is in a bull market right now and it’s hard to find anything else with this kind of price movement and it’s still going on, so people are naturally attracted to it.”
Earlier, a tweet from U.S. President Donald trump caused a stir in the markets. On Wednesday, Mr Trump tweeted that the us navy would shoot down and destroy Iranian gunboats if they harassed us ships at sea. As a result, crude oil, caught in the historic crash wave, seemed to see a glimmer of light, with U.S. WTI crude up nearly 40% at one point and brent crude also rising strongly. U.S. stocks rose for the first time in three sessions as the oil market stabilized.
Mr. Trump warned on Wednesday that the United States would destroy Iranian gunboats that harass American ships at sea.
A few days earlier, the us defence department said Iranian naval vessels of the islamic revolutionary guard corps had carried out “dangerous and provocative” actions in the Persian gulf close to us navy and coast guard vessels.
“I have directed the U.S. navy to shoot down and destroy all Iranian gunboats if they harass our ships at sea,” trump tweeted.
Gold maintained its strong rally on the news, rising as high as $1,718.90 an ounce.
Analysts at bank of America, bullish on the outlook for gold, raised their 18-month price target to $3,000 from $2,000, meaning it will be more than 50 percent above its nine-year record of about $1,921, citing the endless monetary expansion by the central bank to contain a novel coronavirus outbreak.
Ole Hansen, head of commodities strategy at Saxo Bank, said on Wednesday that the gold market appeared to be stagnating around $1,700 and was likely to remain so for most of the year. The threat of a global recession and lower oil prices will keep inflationary pressures under control, which could limit gold prices in the short term. But in the longer term, the outlook for gold looks particularly bright, as a flood of liquidity into the market last month has fuelled inflation fears. Gold is expected to reach $1,800 by the end of the year and hit a record high in 2021. Moreover, long-term gold prices are expected to exceed $4,000.
“The $1,800 level is still possible,” said Colin Cieszynski, chief market strategist at Singapore airlines wealth management. Months, not weeks. Gold is doing very well here, probably stabilizing at $1,650 to $1,750 in the short term, especially as the stock market is still rallying and people are coming back cautiously. “I wouldn’t be surprised if it hits $1,800 later this year, maybe this summer.”
On the daily chart, the dollar index continued the recent rebound trend, MACD red kinetic energy column looming, KDJ random index further higher, indicating the dollar upward momentum to strengthen, the next expected further extension of the rebound.
On the 4 hour chart, the dollar index held the shock uptrend, MACD red kinetic energy column unchanged, but the KDJ random index turned slightly lower, indicating that the dollar may be caught in a short – range consolidation.
On the daily chart, gold fluctuates near high levels, the MACD red kinetic energy column is slightly narrowed, and the KDJ random gauge is mildly under pressure, indicating gold’s downside momentum is ready to move ahead with a possible pullback.
On the 4 hour chart, gold prices after the fall, MACD red kinetic energy column slightly narrowed, KDJ random index turned to pressure, indicating that gold may fall into a consolidation pattern.
- According to the real-time statistics released by Johns Hopkins University in the United States, the total number of confirmed COVID 19 cases in the United States exceeded 840,000, and the total number of deaths was 47,231. The global total of confirmed cases is nearly 2.63 million.
- US President Donald Trump tweeted: “I have directed the us navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea.” A few days earlier, the U.S. defense department said that more than a dozen Iranian Islamic revolutionary guard corps navy ships had carried out “dangerous and provocative” actions in the Persian Gulf near the U.S. navy and coast guard ships.
- The world health organization (who) has received reports of nearly 2.5 million covid-19 cases, and the trend of the disease varies from region to region, who director-general tan tak sai said Wednesday. In most western European countries, the epidemic has been stable or on the decline. Although there are few confirmed cases in Africa, central and South America and eastern Europe, the epidemic is on the rise. Most countries are still in the early stage of COVID 19 epidemic. “Covid-19 is going to be with us for a long time, and there is still a long way to go,” tan said. “many countries have been successful in containing the virus.
- The United Nations world food program has warned that famine on a “biblical scale” is becoming a serious risk as the coronavirus crisis threatens to double the number of people close to starvation. It expects the number of people facing “severe food insecurity” to rise from 135m in 2019 to 265m by the end of the year.
Fundamental negative factors:
- The first novel coronavirus vaccine was approved to enter clinical trials by the German federal institute of vaccines and biological pharmacology Wednesday. In the first phase of the trial, 200 healthy volunteers between the ages of 18 and 55 will be given a slightly modified version of the vaccine, the institute said in a statement on the same day. The second phase will vaccinate other volunteers in the same age group, including vulnerable people.
- President Trump said on Tuesday that the hospital ship Comfort, deployed in New York, would leave the city “in preparation for the next mission.” The comfort is being used to provide emergency assistance to health workers fighting the coronavirus. “There is light at the end of the tunnel,” Trump said of the COVID 19 outbreak. Last week, Mr. Trump said that none of the patients on board showed that New York City was recovering. “It’s a good thing they don’t need it. This is a good thing. I think it shows that New York is making progress.”
- Democrats and Republicans disagreed Monday over who should be held responsible for the delay, as they worked out the details of a bailout that could exceed $450 billion.
- US President Donald Trump says the drop in oil prices is very short-lived. Now is a good time to buy crude, and hopefully, Congress will support it. Up to 75m barrels of oil are being studied for inclusion in the strategic petroleum reserve.