Gold investments: trump is going big! Dollar surges again! Goldman Sachs slams a $100 gold target!

On Wednesday (March 18) in the Asian session, spot gold fell back, trading around $1,530, in recent days significantly increased volatility.

Gold fought back last day, jumping more than 2 percent after hitting a low of $1,465 and briefly touching a high of $1,552 before closing near the 1530 mark. Gold had fallen for five days in a row, attracting heavy buying, but a strong dollar held off gains.

The federal reserve said on Tuesday it would resume a funding facility used during the 2008 financial crisis to provide credit directly to businesses and households, as fears of a new outbreak exacerbated a liquidity squeeze in credit markets in recent days.

Meanwhile, the Trump administration on Tuesday sought a $1 trillion stimulus package, including $50 billion for battered airlines facing bankruptcy and $250 billion in loans for small businesses, to shore up an economy battered by a new outbreak. In addition, the Trump administration is considering sending $1,000 checks to Americans within two weeks.

“We’re going to scale up,” Mr. Trump said, describing the public health crisis as a war against an “invisible enemy.”

Bob Haberkorn, the senior market strategist at RJO Futures in London, said: “the fed’s intervention is helping gold to move higher by providing more liquidity to the market. Gold is starting to show the way it should.”

However, Goldman cut its three-month and six-month gold price targets by $100 to $1,600 and $1,650 an ounce, respectively, according to research published on Tuesday.

Goldman Sachs said gold prices would also be affected by the sell-off in the oil market as a cash squeeze prompted Russia’s central bank and other emerging markets to reduce their purchases.

Goldman Sachs analyst Jeffrey Currie said: “We did not expect such a severe liquidity problem or such a severe demand shock from the fall in oil prices. This means that in the short term, gold prices are likely to remain volatile as they try to find a new equilibrium. Over time, liquidity-related selling will ease and ‘fear’ driven demand may start to dominate.”

Technical analysis:

The dollar

On the daily chart, the dollar on Tuesday again a day shot up, once hit a high of 99.84 level, close to the key 100 points, the day up nearly 160 points, the current us index hovering around 99.40, the huge rise in the consolidation. On the technical side, the MACD red kinetic energy column is expanding rapidly, the RSI index is hovering above 50, and the KDJ random index is approaching the overbought level, suggesting there is still upside space.

On the 4-hour chart, the dollar index is still in a strong rally starting at 94.63. After a strong rally on Tuesday, the dollar rose above all its major moving averages. From the technical perspective, the MACD red kinetic energy column is slightly weakened, the RSI index is down from the overbought level, and the KDJ random index is still at the overbought level, with the risk of a short-term correction.

gold

On the daily chart, golden Tuesday snapped a six-day losing streak and pulled violently higher after hitting a low of $1465, briefly approaching $1555, but failed to close above the 100-day moving average of $1535 and is now hovering around $1530. From the technical perspective, the MACD green kinetic energy column is stable, the RSI index rebounds from the oversold level, and the KDJ random index approaches the oversold level downward. There is still the possibility of further decline.

On the 4-hour chart, gold continues to rally after hitting a previous low of $1,450 and is now winding around its 20-day moving average. Technical point of view, MACD red kinetic energy column small expansion, KDJ random index to rise through 50 closed, short term is expected to continue to rise steadily, but the momentum may be insufficient.

fundamentals Positive factor :

  1. The federal reserve said on Tuesday it would resume a funding facility used during the 2008 financial crisis to provide credit directly to businesses and households, as fears of a new outbreak exacerbated a liquidity squeeze in credit markets in recent days.
  2. In a televised address to the state on Tuesday, gov. Jim Justice of West Virginia announced the first confirmed case in his state but stressed that there was no need to panic. So far, new cases of pneumonia have been confirmed in all 50 states.
  3. Data on Tuesday showed U.S. retail sales fell in February by the most in more than a year.

4.US President Donald Trump said at a news conference on Monday that the US economy may be heading for a recession due to the new pneumonia outbreak, and the worst-case scenario may be in July, August or later, but the US economy may rebound significantly after the outbreak ends.

5.The s&p 500 fell about 12 percent, its biggest daily drop since black Monday 30 years ago, and came within 1.92 percentage points of triggering a second-level circuit breaker.

Fundamental negative factors:

  1. The dow closed up 1048.79 points, or 5.2%, at 21237.31. The index briefly fell below 20,000 for the first time since February 2017 before rebounding. The s&p 500 rose 6 percent to 2,529.19, while the Nasdaq composite index rose 6.2 percent to 7,334.78.
  2. The Trump administration is discussing a plan that could involve as much as $1.2 trillion in spending to stem the economic impact of the new pandemic, including direct payment of at least $1,000 to every American within two weeks. Treasury Secretary Steven Munchin has proposed sending a $250 billion check by the end of April and sending a $500 billion check four weeks later if the U.S. remains in a state of emergency, according to people familiar with the matter. The payouts will be part of a stimulus package that Mr. Mnuchin is negotiating with congress.

3. The bank of Japan pumped more dollars into the financial system on Tuesday than at any time since 2008, and South Korea promised to act soon.

4.National economic adviser frank Kudlow said Monday that the U.S. is ready to do whatever it takes. The US economy will face extreme difficulties in the second quarter but refuses to call it a recession. More than $800 billion in fiscal measures, including possible payroll tax cuts, may be put in place to help the U.S. economy.

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