International spot gold traded at $1,611.80 an ounce in Asian morning trading on Friday. Intra-day gold maintained shock pressure momentum, is now basically hovering in the $1611 / oz area.
Gold rose more than 1 percent, its second straight day of gains, as U.S. jobless claims hit a record high for the second week in a row, adding to fears that the COVID 19 outbreak is hitting the economy and prompting investors to flee to the safe-haven metal.
The number of americans filing new claims for state unemployment benefits surged to a record high of 6.65 million last week as more places moved to limit the spread of the coronavirus, and U.S. stocks fell after an explosion in U.S. jobless claims.
Bob Haberkorn, senior market strategist at RJO Futures in New York, said a surge in initial jobless claims and a drop in stocks had led to a new round of safe-haven buying of gold. The longer the outbreak drags on, the worse it will be in the long run; Gold is an asset that should do well in all this turmoil, all the money printing and interest rates going to zero to fight the effects of the epidemic.
ED&F Man Capital Markets analyst Edward Meir said gold was likely to continue to play an important role in investor allocations in the coming months given the current turmoil. However, volatility will remain high; Signs of prolonged economic weakness and increasingly aggressive stimulus measures by governments and central Banks should provide some support for gold. Gold will continue to be king in the future.
The Chicago mercantile exchange reported on April 2 that COMEX gold inventories were about 10,496,522 ounces as of April 1, up 547,853 ounces from the previous day.
Meanwhile, gold ETF holdings are at an all-time high as risk aversion prevails.
Comex gold futures for June delivery rose 2.9 percent to $1, 637.70 an ounce, recovering from a four-session losing streak.
Gold holdings in etfs hit a new record as the outbreak spurred demand for safety. As of Wednesday, investors had increased their holdings of gold etfs for eight straight days, the longest streak since February, according to data compiled by bloomberg.
Gnanasekar Thiagarajan, of commerzbank’s risk management services division, said investors were buying etfs in large Numbers because the supply of physical gold, such as COINS and bars, could become increasingly tight.
The non-farm report is coming! Watch out for scary negative values
At 20:30 Beijing time on Friday, the us non-farm payrolls report for march was the biggest event of the week. Non-farm payrolls are expected to fall in March as they largely reflect data before the economic pause associated with a novel coronavirus.
The U.S. economy is expected to shed 100,000 jobs in March and the unemployment rate is expected to hit 4 percent, according to a respected media survey. Morgan Stanley, a top investment bank, expects the U.S. economy to shed 700,000 jobs in March.
Wednesday’s “small nonfarm” ADP data had already given warning that nonfarm data could be negative. U.S. businesses shed 27,000 jobs in early march, before the economic freeze caused by the coronavirus reached its peak, according to a report released Wednesday by ADP and moody’s analytics. ‘this is the first decline in private-sector employment in a decade,’ said Mark Zandi, moody’s chief economist. ‘the total number of unemployed could fall by 10 million to 15 million.’ “The virus has ended 10 years of steady job growth,” zandi said on a media conference call.
Data from the labor department on Thursday showed initial claims for state unemployment benefits rose nearly twice as much as expected to 6.648 million in the week ended March 28, from 3.28 million in the previous week to 3.5 million. The jobless claims report provides further confirmation that the us economy has been severely damaged by the outbreak of the coronavirus.
Notably, the march non-farm report is unlikely to give a full picture of the extent of the damage to the job market because it was released before the peak of the coronavirus outbreak.
While march nonfarm was the first to reflect the state of the U.S. labor market under a wave of business closures, the data mostly covered March 14, so it won’t be the worst for some time. Analysts say the bigger job losses are more likely to show up in the April jobs report, due in May.
On the daily chart, the dollar index rebounded further from its lows, with the MACD green momentum column narrowing and the KDJ random index slightly tilted upward, indicating that the dollar rally momentum is still there and may continue to move upward.
On the 4-hour chart, the dollar index showed a modest rebound, the MACD red momentum column unchanged, the KDJ random index slightly more pressure, indicating that gold may maintain upward momentum in the short term, but a little less momentum.
On the daily chart, gold prices began to shock the rebound potential, MACD red kinetic energy column unchanged, KDJ random indicators slightly more pressure, indicating that gold may barely hold rebound momentum.
On the 4 hour chart, gold prices rebounded after a slight fall, MACD red kinetic energy column unchanged, KDJ random index slightly biased down, indicating that gold short term may continue to fall slightly.
fundamentals Positive factors :
- According to statistics from real-time information and data update website worldometers, as of 10:02 Beijing time on April 3, the total number of confirmed covid-19 cases in the United States exceeded 245,066 out of 245,000, 28,967 new cases were confirmed, and the total number of deaths exceeded 6,000 out of 6,075.
- U.S. President Donald trump said he expects Russia and Saudi Arabia to announce significant cuts in crude oil output, and Saudi state media reported that the kingdom was calling for an emergency meeting of oil producers to deal with market turmoil.
- On Thursday, the number of americans out of work in the week to March 28 rose to a record high of 6.6 million, well above expectations of 3.5 million from 3.283 million.
4.US President Donald trump has tested negative for a novel coronavirus, according to a statement released by the White House on April 2.
Fundamental negative factors:
- April 2 Saudi Arabia called for an emergency OPEC + meeting, the Saudi press agency said. OPEC + should seek a fair deal. OPEC + will restore the necessary balance to the oil market. If the oil market returns to calm, the market risk aversion cooling, will constitute a negative for precious metals.
- April 1 the federal reserve reduced the likelihood of a dollar crunch by expanding the ability of dozens of foreign central Banks to obtain dollars during the novel coronavirus crisis, allowing them to swap their holdings of U.S. debt for overnight loans in dollars.
- The sell-off in global stock markets highlights the growing risk of an outbreak that shows little sign of abating, given mounting evidence of a sharp global economic downturn. The dollar’s status as a global reserve currency makes it a natural safe haven.
- Russia’s central bank announced on Monday that it would stop buying gold from April 1, without explaining why.