The DOLLAR index.DUSD was up modestly in Asian trading on Thursday, trading near 97.45. Meanwhile, spot gold has rebounded slightly after falling nearly $30 on Wednesday, with gold back above the $1,700 mark and now trading around $1,702 an ounce. Late Thursday, Beijing time, investors will welcome U.S. jobless claims data, which is expected to guide the dollar and gold. In addition, the European Central Bank will publish monetary policy decision, the central bank may take new policy action, is expected to trigger the euro exchange rate volatility. In terms of the global epidemic, the number of confirmed coVID-19 cases has exceeded 6.56 million globally, and the number of confirmed cases in the United States has exceeded 1.9 million.
Gold prices fell more than 2% Wednesday as risk sentiment improved as investors largely ignored the turmoil in the U.S. and its friction with China and expressed optimism about a recovery from the novel Coronavirus recession.
Spot gold dipped as low as $1,688.89 an ounce, down $29.74, or 1.72 percent, to settle at $1,697.48 an ounce.
Data showing U.S. private payrolls fell less than expected in May, suggesting layoffs are falling as businesses reopen, boosted risk appetite and weighed on gold prices.
ADP and Moody’s Analytics reported that private payrolls fell another 2.76 million in May, well below estimates of 8.75 million. Risk sentiment was further buoyed by data from the Institute for Supply Management, which showed the service sector’s purchasing managers’ index had come off an 11-year low in May and contracted less than expected.
Michael Hewson, chief market analyst at CMC Markets UK, said: “Overall, the market is pleased with the fact that, despite the bad data, conditions are likely to improve, which is taking the shine off gold.”
The dollar fell to an 11-week low against a basket of other currencies on Wednesday amid optimism that the worst recession triggered by the global spread of coronavirus is over.
The dollar index.DXY closed 0.37 percent lower at 97.32 after hitting an 11-week low of 97.17. Improved risk appetite has reduced demand for the dollar, which tends to benefit from safe-haven buying when markets are volatile and investors are reluctant to take risks.
Mr. Hewson added that despite the decline, gold’s performance is expected to continue to be supported by a weaker dollar, street protests in the U.S., tensions between China and the U.S. and inflation fears stemming from the broad economic stimulus package.
Gold, seen as a safe haven, tends to rise on political and economic uncertainty.
Gold came under additional negative pressure on Wednesday, falling below $1,719.00 an ounce and briefly testing key support of $1,691.10, according to Economies.com.
The first major target is at $1,764.00 an ounce, as it waits for gold to get a positive boost to help restore its main bullish trend, Economies.com said. If gold falls below $1,691.10 an ounce, that will put more negative pressure on gold and open the way for a short-term test of the $1,646.00 area.
Jobless claims data hit
Investors will welcome U.S. jobless claims data at 20:30 Beijing time on Thursday. Authoritative media surveys showed initial claims for jobless benefits in the week ended May 30 at 1.843 million.
Jobless claims fell for the eighth straight week to 2.123 million in the week ended May 23, labor Department data showed on Thursday.
The number of AMERICANS still filing for state unemployment benefits fell to 21.05 million from 2.073 million in the week ended May 16.
Analysts said the drop in the number of people continuing claims meant the reopening had allowed some people to avoid filing for unemployment benefits.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said the decline in continuing claims “suggests that the reopening of states is prompting businesses to rehire some people who were laid off when the virus struck.”
“According to the latest unemployment insurance report, large-scale layoffs continue, but the labor market may be approaching a turning point,” said Gus Faucher, chief economist at PNC.
In a report on Sunday, Economists at Goldman Sachs said weekly jobless claims fell steadily as all 50 states began easing home quarantine policies and allowing more businesses to restart, a sign that the labor market was beginning to recover from the coVID-19 outbreak.
If the latest U.S. preliminary data on Thursday turn out to be worse than expected, this could dampen investor optimism and the resulting safe-haven buying could push gold higher, analysts said.
Unemployment in the United States is likely to rise further as the coVID-19 outbreak has brought a halt to all industries, and analysts expect the downward trend in U.S. employment to continue into the third quarter.
European Central Bank resolution
The European Central Bank will announce its interest rate decision at 19:45 Beijing time on Thursday. European Central Bank President Christine Lagarde will hold a press conference at 20:30 Beijing time on Thursday.
With the euro zone’s economy contracting at a record pace in the first quarter and heading for an even worse second quarter, most analysts said the case for immediate stimulus by the European Central Bank was strong.
Interest rates are almost certain to remain on hold as the ECB’s deposit rate, already at a record low of minus 0.5 percent, is viewed by many policymakers as counterproductive.
Economists said the minutes of the ECB’s latest policy meeting, recent comments from policymakers and gloomy eurozone economic data all suggested action was likely in June.
Analysts expect the €750bn emergency asset purchase programme (PEPP) to be expanded by €500bn.
The European Central Bank has made it clear that it will live up to its responsibilities, and the severity of the recession calls for early action.
The European Central Bank will step up emergency asset purchases this week to help pull the economy out of its morass, according to a Bloomberg survey of economists. Most expect the ECB’s stimulus programme to increase by €500bn, with purchases under all programmes reaching €1.6tn this year.
Bank of Tokyo-Mitsubishi UFJ expects the European Central Bank to expand its emergency coVID-19 lending program by 500 billion euros and continue buying bonds through mid-2021.
Td securities believes the ECB is expected to expand its emergency coVID-19 lending programme by 500 billion euros, keeping it in place until 2021.
In March, the ECB launched a €750bn emergency asset purchase programme to support borrowing costs.
Investors will also be watching Ms Lagarde’s comments at the press conference. Lagarde said last Wednesday that the euro zone economy is likely to contract 8 to 12 percent this year as it struggles to overcome the novel Coronavirus epidemic.
Inflation was just 0.7 per cent in March, still below the 2 per cent target, and unemployment was 7.3 per cent.
Like many central Banks, the ECB will remain dovish, willing to do more if necessary to ease the situation until the worst of the epidemic can be seen to be over.
Novel Coronavirus infections worldwide have exceeded 6.56 million with more than 1.9 million cumulative confirmed cases in the United States
According to the latest statistics, the cumulative number of confirmed cases of COVID-19 globally has exceeded 6.56 million. More than 200,000 people have been diagnosed in seven countries, including Brazil, Russia, Spain, the United Kingdom, Italy and India. The cumulative number of confirmed cases in the United States now exceeds 1.9 million.
The number of countries with more than 100,000 confirmed cases globally rose to 14, ranked more or less by the United States, Brazil, Russia, Spain, United Kingdom, Italy, India, Germany, Peru, Turkey, Iran, France, Chile and Mexico. Mexico has just passed the 100,000 confirmed cases mark. The number of confirmed cases in Canada is now approaching 100,000.
According to world real-time world statistics, as of 9:39 PM On June 4, the total number of confirmed cases of COVID-19 worldwide has exceeded 6.56 million, reaching 656,7393, and the total number of deaths has exceeded 387,913. The United States has the world’s largest number of cumulative confirmed cases of COVID-19, with more than 1.9 million cases to 1901,783 and more than 109,000 deaths to 109,142.
Protests over the death of an African-American man, George Floyd, by a white police officer in Minnesota have spread across the US for days, with riots and violent clashes. The United States media noted that more than a dozen public health experts, in interviews, expressed concern that the demonstrations would lead to novel Coronavirus further dissemination as many unmasked police clashed with protesters.
Even if all relief funds are used to mitigate the effects of coVID-19, the epidemic could still cost the U.S. economy $7.9 trillion over the next decade, according to data released by the Congressional Budget Office on June 1.
In response to the outbreak, Congress has enacted a $2.2 trillion economic rescue bill, issued cash checks to low-income Americans, and expanded loan programs for small and medium-sized businesses that have been hard hit by the outbreak.
Novel Coronavirus vaccine may not provide long-term immunity, according to an interview with JAMA published on June 2. The immune period from a common coronavirus virus can range from 3 to 6 months and usually no more than a year.
On April 11 local time, US President Donald Trump approved Wyoming as a “state of major disaster” due to coVID-19. For the first time in US history, all 50 STATES, Washington DC and the four overseas territories of the US Virgin Islands, northern Mariana Islands, Guam and Puerto Rico are in a state of “major disaster”.
Major epidemic in overseas countries, Worldometers world real-time statistics, as of 9 PM Beijing time on June 4, 39 points, Brazil COVID – 19 confirmed 584562 cases, Russia has confirmed 432277 cases of accumulative total of 287406 cases of the patients in Spain, the UK has confirmed 279856 cases, Italy has confirmed 233836 cases, India has confirmed 216824 cases, Germany has confirmed 184396 cases, confirmed 178914 cases of Peru, Turkey has confirmed 166422 cases, Iran has confirmed 16,696 cases, France 151,677, Chile 113,628, Mexico 101,238 and Canada 93,085.
On the epidemic in China, 31 provinces (autonomous regions and municipalities directly under the Central Government) and the Xinjiang Production and Construction Corps reported a new confirmed case from 0:00 to 24:00 on June 3, imported from abroad (in Guangdong), according to the National Health Commission on Thursday. No new deaths; There were no new suspected cases.
As of 24:00 on June 3, 31 provinces (autonomous regions and municipalities directly under the Central Government) and the Xinjiang Production and Construction Corps have reported 69 confirmed cases (including 2 severe cases), 78,319 cured and discharged cases, 4,634 deaths, 83,022 confirmed cases and 3 suspected cases. A total of 746,084 close contacts and 4,360 close contacts are still under medical observation.
On June 3 local time, WHO Director-General Tedros Adhanom Ghebrev expressed “particular concern” about the rapid development of the epidemic in Central and South America. Dr. Tedros noted that in the past few weeks, the number of daily cases reported in the Americas “exceeded the number reported in the rest of the world combined.” Over the past five days, more than 100,000 new cases of COVID-19 have been reported globally each day, Tedros said.
On June 1 local time, WHO Director-General Tedros Adhanom Ghebrev said that large gatherings can lead to super-spread events and the WHO has issued updated technical guidance to help organizations decide how and when it is safe to restart large gatherings.