Gold prices rose nearly $15 an ounce on Wednesday after federal reserve chairman colin Powell said more stimulus measures would be needed to ease the economic impact of the covid-19 outbreak. The dollar index against a basket of currencies held firm at around 100.25 after Powell’s comments dampened expectations of negative interest rates and spurred a sharp rise in the greenback in New York on Wednesday. Late Thursday, investors will welcome U.S. jobless claims data, which is expected to guide the dollar and gold. In terms of the global epidemic, the total number of confirmed covid-19 cases worldwide has exceeded 4.42 million, and the total number of confirmed cases in the United States has exceeded 1.43 million. The who warned on Wednesday that novel coronavirus could become a long-term problem that could become an epidemic virus that never goes away.
Gold prices closed near 1710 after Powell’s comments sparked a rally on Wednesday
In Asia on Thursday, spot gold continued to fall short – term, is now around $1,712 an ounce. Gold prices rose strongly on Wednesday as Powell’s comments raised expectations of more monetary stimulus from the federal reserve.
International spot gold rose as high as $1,717.80 an ounce in midweek trading, up $13.46, or 0.79 percent, to $1,715.50.
Analysts said some investors were taking profits after the rally, which weighed on gold prices in the short term.
Fed chairman colin Powell said Wednesday that weak economic growth and stagnant incomes will continue for “an extended period.” Powell promised the fed would use more tools if needed, and he called for more fiscal spending.
“While the economic response is timely and proportionate, it may not be the last chapter given the highly uncertain path ahead and the significant downside risks,” Mr Powell said in a live webcast with the peterson institute for international economics.
Central Banks and governments have provided unprecedented fiscal and monetary support to affected economies. Gold tends to benefit from broad-based stimulus because it is seen as a hedge against inflation and currency depreciation.
Standard chartered analyst Suki Cooper said: “the fed has many other options, so it is possible we could see more quantitative easing or a sustained policy that creates a positive environment for the gold market.”
Cooper added: “we expect global interest rates to remain low, with some countries experiencing negative rates, which will continue to provide a favourable environment for gold.”
Chris Gaffney, President of global markets at TIAA Bank in London, said gold’s rise was likely to continue, even if the economy rebounded quickly. It added: “as the economy will gradually rebound, the fundamentals underpinning gold will shift from a flight to safety over the pandemic to uncertainty over inflation and central bank indebtedness.”
The leading financial website Economies.com wrote on Thursday that it is now waiting for gold to rise further to confirm a continuation of its bullish trend, with the first major target at $1,747.43 an ounce and the higher target at $1,785.00 an ounce.
Maintaining gold above $1,678.45 an ounce is the most important condition for achieving the bullish target, Economies.com added.
Some market participants said gold’s long-term outlook was positive as it tended to benefit from extensive central bank stimulus because it was widely seen as a hedge against inflation and currency depreciation.
Gold has risen more than 12% this year as central Banks around the world have launched a series of stimulus measures to limit economic losses.
Chris Weston, director of research at Pepperstone, said gold has reasons to rise in the face of global fiscal deficits, currency depreciation, negative interest rate bonds and inflation, and the next key level to watch is $1,738 an ounce.
“The gold market has been in the $1,738 to $1,678 range since mid-april,” Weston said. “it’s a very interesting phase to be in. If gold can effectively break through the $1,738 level, investor interest will pick up and the bullish trend will continue.”
Mr Powell’s comments hit negative interest rate expectations for a boost to the dollar
Federal reserve chairman colin Powell said Wednesday policy makers may have to use more weapons to pull the U.S. out of the economic mire.
He noted that the coronavirus has caused a different situation from past recessions in the United States, and the response is likely to come more from congress than from the federal reserve.
In a question and answer session that followed, he said the fed was not considering negative interest rates. “The committee’s view on negative rates really hasn’t changed,” said Mr Powell. That’s not something we’re thinking about.”
US President Donald trump said he still strongly believes the federal reserve should adopt negative interest rates, but gave a nod of approval to fed chairman colin Powell. Trump said Powell’s performance has improved during his tenure as fed chairman, but he still disagrees with him on the interest rates the fed sets on loans.
The dollar index hit a low of 99.60 at the start of Mr Powell’s speech, but has since climbed from that low to a session high of 100.29 as his comments dampened expectations of negative interest rates.
Karl Schamotta, chief market strategist at Cambridge Global Payments, said: “Mr Powell has clearly put the prospect of negative rates on hold. Market participants will seek enhanced forward guidance and clearer forms of yield curve control at the June meeting.”
Us jobless claims data hit
Investors are bracing for U.S. jobless claims data at 20:30 GMT on Thursday. Initial U.S. jobless claims are expected to be 2.5 million in the week ended May 9, according to a respected media survey.
New claims for state unemployment benefits hit 3.169 million in the week ended May 2, the fifth straight week of declines, labor department data showed on Thursday.
Analysts said gold could get a further boost if the latest U.S. data on Thursday comes in worse than expected, which could spur safe-haven buying.
Initial claims are expected to remain in the millions for weeks as the effects of novel coronavirus seeps through the economy.
“Initial jobless claims will be the most timely hard data to gauge the extent of the recession and capture the start of the recovery,” Goldman sachs analysts said in a recent note to clients.
With the covid-19 outbreak shutting down industries, the number of U.S. job losses is likely to rise further, and analysts expect the downward trend in U.S. employment Numbers to continue into the third quarter.
More than 1.43 million cases of covid-19 have been confirmed in the United States, and more than 4.42 million people have been infected worldwide. The who has warned that covid-19 could become a pandemic virus
According to the latest statistics, the cumulative number of confirmed covid-19 cases worldwide has exceeded 4.42 million. At present, the number of confirmed cases has exceeded 100,000 in 10 countries, including 1.43 million in the United States.
Worldometers world real-time statistics show that as of 9:43 am Beijing time on May 14, the global total number of confirmed covid-19 cases exceeded 4.42 million, reaching 4.28236, and the total number of deaths exceeded 298,000, reaching 298,083. The us has the largest number of confirmed covid-19 cases in the world, with more than 1.43 million cases, or 1430,348, and more than 85,000 deaths, or 85,197.
Major epidemic in overseas countries, Spain COVID – 19 accumulative total of 271095 cases of the patients, Russia has confirmed 242271 cases, the UK has confirmed 229705 cases, Italy has confirmed 222104 cases, Brazil has confirmed 189157 cases, confirmed 178060 cases of France, and Germany has confirmed 174098 cases, Turkey has confirmed 143114 cases, Iran has confirmed 112725 cases, India has confirmed 78055 cases, confirmed 76306 cases of Peru, Canada has confirmed 72278 cases, Belgium has confirmed a total of 53,981 cases.
In China, from 0:00 on May 13, 31 provinces (autonomous regions and municipalities directly under the central government) and the xinjiang production and construction corps reported three new confirmed cases, all of them local (two in liaoning and one in jilin), according to the latest update from the national health commission on Thursday. No new deaths; No new suspected cases were reported.
As of 24:00 on May 13, according to reports from 31 provinces (autonomous regions and municipalities directly under the central government) and xinjiang production and construction corps, there have been 101 confirmed cases (including 9 severe cases), a total of 78,195 cured and discharged cases, 4,633 deaths, 82,929 confirmed cases and 4 suspected cases. A total of 738,262 close contacts have been traced, and 5,291 close contacts are still under medical observation.
On May 13, local time, the world health organization (WHO) held a regular briefing on covid-19. “The novel coronavirus could become a long-term problem,” said Michael Ryan, who’s director of health emergency programs, at a press conference. “it’s difficult to predict when the virus will prevail and it could become an epidemic virus that will never go away.” Michael Ryan says he hopes a highly effective vaccine can be developed and distributed to all people in the world.
Michael Ryan also said that the risk level of covid-19 will be reassessed over time and will consider lowering it. But he also stressed that until the spread of the virus is effectively controlled and comprehensive public health surveillance is in place, and health systems are strengthened to deal with a possible recurrence, who considers the outbreak to be a high risk for the world and all regions and countries.