On Thursday (March 26), spot gold continued to fall from the day’s highs, at one point losing control of the key 1,600 level after hitting as high as $1,617.
Gold prices were little changed last day after hitting a two-week high of $1,643 before closing above $1,610 as investors weighed whether the $2 trillion U.S. stimulus package would save the market.
Despite the willingness to take risks spurred by America’s $2 trillion stimulus bill, the truth is that America’s epidemic is still getting worse. According to the real-time statistics from Johns Hopkins university, as of 7 am on the 26th, there were 65,285 confirmed cases, 926 deaths and 361 cured cases of covid-19 in the us. More than 12,017 new cases were confirmed in the United States, the third consecutive day of more than 10, 000 new cases and 230 new deaths.
In addition to the outbreak, a bigger risk may be brewing tonight: U.S. jobless claims on Thursday could set the market on fire again.
Investors are likely to reduce their exposure to the dollar ahead of Thursday’s jobless claims data. Data on Thursday is expected to show a surge in U.S. jobless claims as businesses across the country close their doors to contain the spread of the virus.
At 20:30 Beijing time tonight, the number of americans filing new claims for jobless benefits for the week ending March 21 will be released, and many investment Banks expect the data to be “extraordinary” or a new record.
More than 1 million people have been registered as unemployed since March 13, governor newsom said on Monday. White House economic adviser frank kudlow also said the national unemployment rate, which is due to be released Tuesday, will show a big increase.
Between 1 million and 4 million americans filed for unemployment benefits last week, according to preliminary estimates, which would be the largest number in such a short period.
Historically, the highest number of claims was 695,000 during the 1982 world economic crisis. Already, investment Banks are predicting tonight’s figure could be as high as five times its all-time high, the highest level of new claims in U.S. history.
Bank of America merrill lynch expects as many as 3 million americans to file for unemployment benefits last week, td bank estimates 2.5 million, Goldman sachs 2.25 million, barclays 2 million, citigroup 4 million and Morgan Stanley 3.4 million.
“This is just the tip of the iceberg. They’re going to be ugly. Depending on the pace of claims, it could get worse next week, “said Diane Swonk, chief economist at Grant Thornton. As of Saturday, Swonk expects claims to be between 1 million and 2 million, up sharply from 281,000 in the previous week.
Jon Hill, fixed income strategist at BMO, said, “this number will be closely watched to gauge how much of an impact business failures have on the job market. There are 15.8 million people working in the leisure and hospitality sector, which has been shut down.”
On the daily chart, the dollar index has continued to come under pressure after two days of heavy losses, trading below the 101 level and without strong support before the 99 level. On the technical side, the MACD red kinetic energy column continued to weaken, the RSI index held steady above 50, and the KDJ random index dropped from the overbought level, suggesting further declines.
On the 4-hour chart, the dollar index is in a volatile downward trend from the 103 level. It has now broken through the 20 moving average and is testing the 50 moving average of 100.80 to see if it can hold this moving average. In technical terms, MACD green kinetic energy column steady, RSI index trading below the 50 level, KDJ random index hit the oversold level down, alert to the possibility of correction rebound.
Daily chart, gold in three consecutive days after the start of high consolidation, the current gold price hovering around $1600, focus on the ability to hold the 50-day average 1585 level. From the technical perspective, the MACD red kinetic energy column initially appeared, RSI index trading near the 50 level, KDJ random index to rise above the 50 level, pay attention to the possibility of further higher.
On the 4-hour chart, gold’s recent rally has stalled around $1,643 and is now in a consolidation mode, approaching its 200-day average of $1,596 and the 100-day average of $1,586 below. Technical point of view, MACD red kinetic energy column is close to disappearing, KDJ random index fell below 50 level, short or further down.
fundamentals Positive factors :
- According to the real-time statistics released by Johns Hopkins University in the United States, as of 7 o ‘clock on March 26, Beijing time, a total of 65,285 confirmed COVID 19 cases and 926 deaths were reported in the United States, with the number of new cases exceeding 10,000 for the third consecutive day.
- The U.S. Senate is scheduled to vote on the economic rescue plan on Wednesday, but as the vote neared, several republican senators called for changes to some provisions of the bill, saying the provisions on unemployment benefits are too “generous” and encourage job losses.
- The cumulative number of deaths in the UK has risen to more than 400 and the cumulative number of confirmed cases to more than 8,000, putting further pressure on the country’s healthcare system, which is ill-equipped to help patients, and on the UK economy.
- The European Union’s disease control agency said on Wednesday that the novel coronavirus was unlikely to disappear during the summer. The agency issued a stern warning that the outbreak could continue as temperatures rise if measures are not taken to stop its spread.
Fundamental negative factors:
- The governor of New York said on Wednesday that there were early signs that restrictions were slowing the spread of the coronavirus in his state.
- U.S. President Donald trump and vice President mike pence held a conference call with Wall Street leaders to discuss the economic impact of COVID 19. Mr Trump said he accepted he could not restart the economy immediately but did not want to shut it down for six months, prompting an outburst of risk sentiment.
- Three of the world’s largest gold refineries, Valcambi, argor-heraeus and PAMP, said they had suspended production for at least a week as Switzerland forced the closure of the country’s non-essential industries to prevent the spread of COVID 19. The three refineries are thought to process about 1,500 tonnes of gold a year, about a third of the world’s annual supply.
- Wall Street rallied on signs that Congress is close to reaching an agreement on a $2 trillion economic rescue plan.