Gold morning post: thanks to the fed! Gold prices jumped more than $50 overnight to cover the gap! “Divine forecast” Goldman Sachs again

Spot gold, which rose more than $50 overnight on Wednesday, is trading around $1,640 as concerns continue over the impact of the outbreak on the global economy.

After the rba fired its first rate-cutting shot last week, the overnight fed cut interest rates by 50 basis points, its first emergency rate cut since the 2008 financial crisis. All three major U.S. stock indexes closed down nearly 3 percent.

The decision to cut rates underscores the fed’s concerns about the new outbreak, which has spread around the world. The decision was announced two weeks ahead of a scheduled policy meeting at which traders fully priced in a 50 basis point cut.

While federal reserve chairman colin Powell reiterated his view that the U.S. economy remains strong, he acknowledged that the spread of the virus has led to a material change in the fed’s outlook for growth.

The fed cut was in line with Goldman’s expectations. Goldman sachs analysts predicted on Sunday that the fed would cut rates soon or act before its March 17-18 policy meeting. The bank said it now expects the fed to cut rates by 50 basis points by March 18 and another 50 basis points in the second quarter, for a total of 100 basis points from its current 1.50-1.75 target range.

In a note released after the fed cut rates, Jan Hatzius, chief economist at Goldman sachs, said there was a “conflict” between fed chairman colin Powell’s comments, but that all things considered, the fed is expected to cut rates by another 25 basis points later this month and again next month.

Goldman sachs points out that uncertainty is high on several dimensions: the fed’s response, the number of new cases in the us in the coming weeks, the extent of the weakening in us and global economic data, and the state of financial markets.

All things considered, however, our benchmark expectation is that the fed will announce another quarter-point cut at its March 17-18 meeting and another quarter-point cut in April (previously we had expected the fed to cut rates twice in the second quarter).

Technical analysis:

The dollar

On the daily chart, the dollar index tumbled again overnight, losing the key 97 levels and now trading around 97.20, well below all major averages, on the back of an emergency rate cut. Technically, the MACD green kinetic energy column expanded sharply, the RSI index and the KDJ random index both hit oversold levels, and we are concerned about the possibility of an oversold rebound.

Figure 4 hours, the dollar index decline, falling from the high of 99.90 above to below the 97 marks, have lost all mainline level, short occupied the main position, the kinetic energy of the MACD green column weakening, RSI indicators and random indicators KDJ hovered above the oversold level, pay attention to short-term correction in May, should be combined with the fundamental consideration.

gold

On the daily chart, gold surged above $50 overnight, having covered Friday’s steep drop, and is now trading high above the main moving averages. Technically, the MACD green kinetic energy column is close to disappearing, the RSI index is above the 50 levels, the KDJ random index has hit the 50 levels, and the short-term trend may continue to oscillate.

On the 4-hour chart, gold’s overnight rally broke through resistance at the 1650 level and is now trading near that level, already above the main moving average. Technically, the MACD red kinetic energy column continues to expand, and the KDJ random index approaches the overbought level, focusing on the possibility of a short-term correction.

Fundamentals favorable factors:

  1. South Korea has confirmed 516 new cases of coronary pneumonia, with a total of 5,328 confirmed cases, according to the Korean center for disease control and prevention.

2. The federal reserve on Tuesday cut its benchmark interest rate by 50 basis points, the first emergency rate cut since the 2008 crisis.

3.US President Donald trump has called on the federal reserve to further ease monetary policy in line with other countries/competitors. It said it was working with congress to pass an estimated $8.5 billion emergency funding bill for the new coronavirus.

4.The Washington state department of health has confirmed a total of 27 new cases of coronary pneumonia in the state, including nine deaths, up from a total of 18 confirmed cases and six deaths on Monday.

Fundamental negative factors:

  1. The organization understands concerns about whether the current 2019 coronavirus outbreak constitutes a global epidemic, tandersey said again. ‘who is monitoring and analyzing the situation and data all the time,’ he said. If there is evidence that the outbreak has become a global pandemic, who will not hesitate to define it as a pandemic, but it now needs to be seen in a different light.
  2. The managing directors of the international monetary fund and the world bank said in a joint statement on Monday that they stand ready to help member states deal with the human tragedy and economic challenges posed by the coronavirus outbreak in 2019.

3.Haruhiko kuroda, governor of the bank of Japan, also helped calm nerves on Monday March 2 by saying the central bank would take necessary steps to stabilize financial markets.

4.According to the announcement of hubei provincial health and fitness commission on March 2, there were 196 new cases of coronary pneumonia in the province from 0 to 24 o ‘clock on March 1, 2020, including 193 cases in wuhan, 2 cases in jingmen city, 1 case in jingzhou city, and 0 cases in the other 14 cities and states.

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