Gold just went up sharply! Over 1715! Lagarde’s speech comes today. Don’t forget the big deal: the crucial ruling in meng wanzhou’s case!

Both the dollar index and spot gold rebounded in Asian trading on Wednesday, with the dollar index near 99.10. Spot gold rallied quickly to break through $1,715 an ounce, after falling nearly $20 on Tuesday. Some analysts said renewed tensions between China and the United States were supporting gold prices, and some investors may be looking to buy on dips. On the trading day, investors are bracing for comments from European central bank President Christine lagarde that are expected to influence the euro. In addition, on May 27, local time, the high court of British Columbia, Canada, will make a ruling on the “double crime” in the case of meng wanzhou, a senior executive of China’s huawei technologies co., which has attracted much attention. Some Canadian media said that the decision in meng wanzhou’s case will affect the direction of canadian-chinese relations.

Gold prices fell more than 1 percent on Tuesday as major economies further eased restrictions related to novel coronavirus, raising hopes of an economic recovery and boosting market risk appetite. Spot gold week closed at $1708.32 an ounce, down $18.83, or 1.09 percent, to $1710.36 an ounce.

According to an article on Economies.com, gold prices fell sharply on Tuesday and fell below $1,725.90 an ounce, activating the negative effects of the double-top pattern. As a result of these negative factors, gold is expected to fall further and test its next major target of $1,691.10 an ounce.

Unless gold breaks through $1,725.90 an ounce and remains above that level, it is still expected to show a bearish bias in the next few sessions, Economies.com added.

“There is a risk-on tone that is driving the reversal of safe-haven flows [in gold],” said Daniel Ghali, commodities strategist at TD Securities.

Carlo Alberto De Casa, chief analyst at ActivTrades, said in a note that a fall below $1,725 would increase the likelihood of gold testing $1,700 again and possibly falling further to $1,671 to $1,675, a strong support level.

Last week, gold, a hedge against political and financial uncertainty, climbed to its highest level since October 2012, driven by monetary and fiscal stimulus, fears of recession and tensions between China and the United States.

In Asian intraday trading on Wednesday, gold prices rebounded after Tuesday’s sharp drop, with spot gold quickly rising above $1,715 an ounce and as high as $1,715.68 an ounce. Some market watchers said renewed tensions between China and the us were supporting gold prices.

The third session of the 13th National People’s Congress (NPC) will deliberate on the draft decision of the NPC on establishing a sound legal system and enforcement mechanism for the Hong Kong special administrative region to safeguard national security, said zhang yesui, spokesman for the session.

US President Donald trump responded to Hong Kong’s draft national security law last week by saying that “no one knows yet” the details of China’s plans, but he said: “if that happens, we will respond very strongly.” He didn’t elaborate. Mr Trump also said he would issue a full statement on the proposals “at an appropriate time”.

Us national security adviser Robert O ‘brien said on us media on May 24 that the us would impose sanctions on China if it approved legislation. He also said the legislation could lead to Hong Kong losing its status as a global financial center. Critics say the threat of us sanctions against Hong Kong risks a repeat of last year’s damaging trade war between China and the us.

Sean Lusk, co-head of institutional commercial hedging at Walsh Trading, expects investors to continue to buy gold on dips.

“Investors could see history repeating itself as china-centred political tensions reignite fears of another trade war,” said strategists at ING.

Charlie Nedoss, senior market strategist at LaSalle Futures Group in Chicago, said gold prices could rise as soon as panic sets in. “As China becomes more domestically focused and the situation in Hong Kong develops, the dynamics of the gold market are shifting from an inflationary trade to a geopolitical and economic panic trade,” Nedoss said. I expect gold prices to move higher this week.”

Colin Cieszynski, chief market strategist at IA Wealth Management, said it was also important to watch closely how geopolitical tensions affect the overall global recovery and whether they might “force central Banks to do more.”

Adrian Day, chairman and chief executive of Adrian Day Asset Management in Toronto, said gold could fall before rising this week. “As the U.S. economy starts to restart, there will be some initial optimism in equity markets, which could trigger a long overdue pullback in gold prices, but we remain fundamentally very bullish on gold due to the so-called ‘policies’ pursued by major central Banks around the world,” Day explained.

Optimism weighed on the dollar as lagarde spoke

The dollar fell across the board on Tuesday as optimism about a possible covid-19 vaccine and the reopening of the global economy helped investors shrug off tensions between China and the United States, weakening demand for safe-haven assets.

In late afternoon trading, the dollar index.dxy was down 0.79 percent at 99.00, after hitting an intraday low of 98.89. On Wednesday, the Asian intraday dollar index rebounded modestly to around 99.10.

Novavax, the new clinical stage biopharmaceutical company, said it had begun human trials of its candidate vaccine and expected to release preliminary immunogenicity and safety results in July. Last week, another biotech company, Moderna, reported positive progress in its vaccine trials, with all 45 participants developing coronavirus antibodies.

According to Fundstrat, there are currently 10 vaccines undergoing clinical evaluation and 114 vaccines undergoing preclinical evaluation.

Tuesday’s data also boosted confidence that the U.S. economy has hit bottom as it reopened its markets. The consumer confidence index jumped to 86.6 from 85.7 in April, according to the conference board. Economists polled by dow Jones were expecting a reading of 82.3 for may. Meanwhile, new home sales in April also beat expectations. Sales of new single-family homes rose 623,000 last month, according to dow Jones, beating expectations of 490,000.

On Tuesday, the euro rose for the first time in four days, or 0.76 percent, to 1.0982, as the dollar weakened against a basket of currencies.

From a technical point of view, the euro/dollar upside resistance at 1.1021, further resistance at 1.1061, key resistance at 1.1126, analysts said. The initial support for the fall in the exchange rate is at 1.0916, further support at 1.0851, more key support at 1.0812.

European central bank President Christine lagarde is due to speak at 15:30 GMT on Wednesday, and her comments could move the euro. Ms lagarde has said recently that the ECB is ready to increase its asset purchases if necessary.

European central bank (ECB) President Christine lagarde said last Monday the central bank will continue its bond-buying program despite a challenge from Germany’s highest court on the legality of one of its bond-buying programs.

“I am not worried at all,” lagarde said at the time. “I am not worried about the coronavirus program, or about the bond-buying program that the euro system has been running since 2015. We still haven’t achieved our price stability target.”

In march, the European central bank announced an emergency bond-buying program (PEPP) to buy €750 billion of bonds this year. Most economists predict the ECB will have to expand the programme – possibly as early as its next policy meeting on June 4.

Bank of America merrill lynch’s global research team said on Tuesday: “we expect the euro to weaken in the coming months due to: a weaker than consensus global outlook; A deeper recession in the euro zone than in America; Eurozone policy constraints; Peripheral sovereign risk; And long euro market positions.”

The crucial ruling in meng wanzhou’s case comes today

Meng wanzhou, chief financial officer of Chinese telecommunications giant huawei, will be sentenced on Wednesday on whether she has committed a “double offense,” the Supreme Court of British Columbia said on May 21. If the verdict does not meet the conditions for extradition and prosecutors drop their appeal, Ms. Meng will be freed immediately.

“China’s position on the meng wanzhou incident is consistent and clear,” Chinese foreign ministry spokesman zhao lijian said in response to questions on May 26. The us and Canada have abused their bilateral extradition treaties, taken arbitrary coercive measures against Chinese citizens, and seriously violated the legitimate rights and interests of Chinese citizens. This is a serious political incident.”

On December 1, 2018, Canadian police arrested meng wanzhou at vancouver international airport at the request of the United States, in a case that has brought china-canada relations to a deadlock. The us then requested his extradition, accusing him of “concealing huawei’s business dealings with Iran” and “defrauding HSBC” to evade us sanctions against Iran.

The U.S. department of justice formally filed a criminal complaint on Jan. 28, 2019, asking Canada to extradite Ms. Meng to stand trial in the United States. So far, Ms. Meng has been under house arrest for more than 500 days, with the United States accusing her of “bank fraud,” “concealing business dealings between huawei subsidiaries and Iran,” and of violating U.S. sanctions against Iran.

Heather Holmes, deputy chief justice of British Columbia’s Supreme Court, will decide on May 27 whether Ms. Meng’s case constitutes a “double offense.” Canadian law requires the person to be extradited for an alleged act that constitutes a crime in both Canada and the United States.

Ms. Meng could be freed immediately if Mr. Holmes rules that she did not constitute a “double offense,” but it will depend on whether Canadian lawyers representing the United States decide to appeal. If Holmes determines that Ms. Meng is guilty of a “double offense,” the extradition case will proceed, and Ms. Meng’s lawyers will have to find other reasons to defend her.

Ms. Meng’s lawyers argued that the absence of sanctions against Iran when Canadian officials approved the start of the extradition process meant that Ms. Meng’s arrest did not meet the legal standard of a “double offense.” In other words, if the judge ruled that Ms. Meng’s actions were not illegal in Canada, the other charges would be dismissed.

At the same time, the prosecutor’s lawyer also insisted that the “bank fraud” charges against her, saying there was no need to refer to the us sanctions. Ms. Meng’s legal team stressed that, logically, the “bank fraud” charge was based on “sanctions,” and since Canada had no sanctions against Iran, the financial institutions involved would have no legal risks to bear, so the charge would be invalid in Canada as well.

Bloomberg said Tuesday that it would be “meng wanzhou’s first chance to be released.” Ms. Meng’s lawyers argued that Canada did not impose sanctions on Iran when Canadian officials approved the start of the extradition process, meaning that Ms. Meng’s arrest did not meet the legal standard of a “double offense.”

Canada’s globe and mail newspaper said Thursday that the verdict in meng’s case will affect the direction of canada-china relations.

“The Chinese government is firm in its determination to safeguard the legitimate rights and interests of Chinese citizens,” zhao lijian said at a regular foreign ministry press conference on May 26. The Canadian side should earnestly correct the mistake, immediately release Ms. Meng wanzhou and ensure her safe return to China so as to avoid sustained damage to china-canada relations.”

When asked by a Canadian journalist, “if the Canadian court makes an adverse ruling against Bangladesh, will China take retaliatory measures?” “I don’t answer hypothetical questions,” Mr Zhao said.

According to Canadian media, the Supreme Court of British Columbia, Canada, will release the verdict on the double crime issue in meng wanzhou’s case at 11:00 am local time on May 27, and decide whether meng wanzhou’s case meets the standard of double crime. The court’s decision will be emailed to Ms. Meng’s lawyers and those of Canada’s attorney general at 9 a.m. on Tuesday.

Whether it constitutes a double offense is key to whether Ms. Meng will be extradited to the United States. Under Canadian law, the alleged act of an extradite must not only violate the laws of the extraditing country, but also constitute a crime in Canada.

‘We believe in the openness, fairness, and justice of Canadian law,’ Mr. Ren said in an earlier interview.

Leave a Reply

Your email address will not be published. Required fields are marked *