Gold investments: the biggest crisis since the great depression?! Investment Banks ultra pessimistic expectations! Gold double bottom faint if present!

Over the weekend, the outbreak of COVID 19 in the United States worsened sharply. Monday (March 23) Asian market intraday, the market once again surprised riot scene: the United States stock futures opening “down limit”, the Korean stock market hit a down circuit, crude oil at one point down 5%, spot gold opened jumped sharply after a sharp fall…

Last week saw a broad dip in gold, with prices briefly touching a low near $1,450 before trying to stabilize above that level and ending just below the $1,500 mark, still down about $30 for the week.

The outbreak in the United States escalated rapidly over the weekend. A total of 32,717 confirmed cases, 409 deaths and 178 cured cases of covid-19 were reported in the United States as of 6 p.m. Edt on March 22, according to a real-time statistical system of covid-19 data released by Johns Hopkins University. In less than 18 hours Tuesday, 6,670 new cases were confirmed in the United States.

On March 22, local time, US President Donald Trump declared Washington state a “major disaster area” for COVID 19, and ordered the federal government to provide assistance to all levels of the state government. There are currently 1,793 covid-19,793 cases in the state, with 94 deaths. Mr. Trump had already declared New York a “major disaster area”.

There have been cases in all 50 states and the nation’s capital, with New York the worst hit, with 15,793 confirmed cases and 117 deaths. They were followed by Washington state, which has 1,996 confirmed cases and 95 deaths, New Jersey and California. New Jersey has 1,914 confirmed cases and 20 deaths. California has 1,648 confirmed cases and 30 deaths.

New York City mayor Bill DE Blasio on Sunday described the outbreak as the biggest domestic crisis since the great depression and called on the U.S. military to mobilize to prevent the health care system from becoming overwhelmed.

“If we don’t get more ventilators in the next 10 days, people who didn’t have to die will die,” DE Blasio said. The number of cases of a novel coronavirus in the most populous U.S. city has exceeded 15,000, and the number of deaths has climbed to more than 100.

According to the New York Times on March 20, researchers at Columbia University used mathematical models to predict the development of new outbreaks in the United States. The current outbreak in the United States is in its infancy, with a peak not expected until May at the earliest, according to the study. If left unchecked, novel coronavirus could spread across the United States, peaking at 500,000 new cases a day.

Investment Banks are also issuing extremely pessimistic forecasts. Morgan Stanley said novel coronavirus would plunge the United States into a worse-than-expected recession, forecasting a record 30.1 percent drop in second-quarter GDP. Last week, JPMorgan Chase & Co. said it expects U.S. gross domestic product to contract 14% in the second quarter. Goldman Sachs Group Inc., another big-name investment bank, expects second-quarter GDP to plunge 24%.

The bank of America “officially declared the U.S. economy to be in recession” and predicted that GDP would contract by 12% in the second quarter and growth for the year would decline by 0.8%.

Bridgewater, the world’s largest hedge fund, says that without “massive fiscal or monetary intervention”, corporate revenues in the us could fall by a total of $4tn under the new outbreak. “The drop in business revenue will shrink the economy by more than 6 percent. The decline would be in the highest 30 percent range in the second quarter, and we expect the level of economic activity to be more than 10 percent below the level seen at the end of 2019.”

Schaeffer’s Investment Research says current fiscal and monetary policies are being compared to the 2008 financial crisis when holding gold and mining stocks was a big gain. “More government spending combined with stimulus means higher gold prices and a weaker dollar. If this trend continues, with QE and stimulus, the gold market will be pushed higher.”

Technical analysis:

The dollar

On the daily chart, the dollar index initially rose to 102.97, close to the 103 level, before quickly falling back to around 102 to focus on liquidity. On the technical side, MACD red kinetic energy column after a rapid expansion of stability, RSI index since the overbought level fell, KDJ random index is still in the overbought level area, suggesting that prices may be high consolidation.

On the 4-hour chart, the dollar index began to consolidate after hitting 103 and is still above its main moving average, with fundamentals dominating. In technical terms, the MACD green kinetic energy column slightly expanded, RSI index fell back below the overbought level, KDJ random index hovering below the overbought level, short or continue to shock.

gold

On the daily chart, gold has been trying to stabilize after plunging to $1,451 and is now trading around its 200-day moving average, with the focus on getting there. Technically, the MACD green kinetic energy column is gradually shrinking, RSI index hovering in the oversold level slightly above, KDJ random index is still in the oversold level, focus on the possibility of a rebound.

On the 4-hour chart, after earlier hitting a low of $1,451, gold dipped again to $1,454. As the low moves up, watch for the possibility of a double bottom forming. Technically, MACD red kinetic energy column held steady, KDJ random index to rise above the 50 levels, short term is expected to continue to rise steadily.

fundamentals Positive factors:

  1. The number of confirmed cases of a novel coronavirus in the United States stood at 33,073 as of 8:43 p.m. Edt, with a total of 416 deaths and 178 cures, making it the third most confirmed country in the world, according to Johns Hopkins University. Meanwhile, a total of 59,000 has been diagnosed in Italy.
  2. When Asian markets opened on Monday (March 23), U.S. stock futures quickly fell more than 5%, touching the downside circuit breaker limit. Among them, dow futures fell 5.01 percent, s&p 500 futures fell 5 percent and NASDAQ futures fell 4.88 percent.
  3. At a White House news conference on Sunday, March 22, local time, U.S. President Donald Trump announced that he would deploy federal national guard troops to help combat the outbreak in hard-hit states like Washington, California and New York. Mr. Trump said the region was entering a major disaster zone, allowing the federal government to provide more intensive assistance to those states.
  4. On March 22, German government spokesman Steffen Seibert announced that a doctor who had given Merkel a pneumococcal vaccine had been diagnosed with a coronavirus on Friday, shortly after Merkel announced the new measures. Seibert said Merkel would undergo multiple tests in the coming days and would remain at home for business during the quarantine. He said Merkel had no symptoms of discomfort.

Fundamental negative factors:

  1. On March 23, Treasury Secretary Steven mnuchin recently said he was close to reaching an agreement on a stimulus bill.

2.The European central bank’s announcement of a €750 billion ($817 billion) program of asset purchases to combat the outbreak of the coronavirus spurred risk sentiment.

3. According to a Treasury memo obtained by the Washington Post, the Treasury’s covid-19 stimulus plan is aimed at $1 trillion, including $2,000 in checks for Americans. The plan could also include $300 billion to help small businesses avoid mass layoffs.

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