In the Asian session on Wednesday, the DOLLAR index continued to come under pressure, trading at around 92.20. Spot gold rallied sharply in the short term, climbing back above the $2,000 an ounce mark and now trading near $2004, up more than $10 from the day’s lows. Novel Coronavirus blasted China on Tuesday after NOVEL Coronavirus said trump canceled last weekend’s trade talks with China and “doesn’t want to talk to China right now.” The us department of Transportation said the number of flights between China and the US will double. Investors will continue to focus on U.S. and Chinese developments during the session, while the Fed minutes will also be closely watched, with the dollar likely to take a further hit if the language is dovish, contributing to a rebound in gold prices.
Spot gold briefly fell below $2,000 an ounce in early Asian trading on Wednesday, touching as low as $1993.39 an ounce. But gold prices in the Asian session quickly pulled up, hit $2004 / ounce level.
Analysts said gold still had room to rebound further as the dollar weakened and sino-us relations remained tense.
Analysts at Brown Brothers Harriman said in a report Tuesday that the dollar could fall below the 90 mark as recession fears begin to mount.
“People are looking at the DOLLAR index,” said Phillip Streible, chief market strategist at Blue Line Futures. “The extent of the collapse is quite worrying and we are seeing hard assets like gold and silver rising at the same time.”
Gold prices have surged 32 per cent this year as unprecedented global stimulus has fuelled fears of inflation and currency depreciation.
Wall Street participants expect gold prices to move higher this week, according to Kitco’s Weekly Golden Week survey released Friday.
“The macro environment is still very positive for gold,” said Kevin Grady, President of Phoenix Futures and Options LLC in San Francisco. “Nothing has changed,” Grady said. All the reasons for gold’s rise remain valid – the huge liquidity provided by central Banks and the low interest rate environment. “We haven’t seen a significant unwinding of open positions, which is a sign of bullish sentiment.”
Afshin Nabavi, vice President of precious metals trader MKS SA, said gold prices are unlikely to see another major pullback this week, with $1,900 and $1,925 psychologically good support.
Trump delivers important message on China-Us trade
On Tuesday, U.S. President Donald Trump said he canceled a weekend trade negotiation with China, calling Beijing’s treatment of Novel Coronavirus “inconceivable.”
Speaking in Yuma, Arizona, Mr Trump said: “I cancelled my meeting with China. I don’t want to talk to China right now.” “We’ll see,” Mr Trump said of whether the US would withdraw from the first phase of the agreement.
The aim of the talks is to assess progress six months after the first phase of the trade agreement was signed. Chinese Vice Premier Liu Hehe was supposed to hold a teleconference with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, but the meeting was postponed indefinitely. A source familiar with the talks earlier said the meeting was delayed because top Communist Party officials continued to meet in Beidaihe.
The talks never appeared on any official schedule in Washington or Beijing, but the South China Morning Post reported that they had been scheduled for Saturday. Chinese Foreign Ministry spokesman Zhao Lijian said earlier that information about the high-level talks would be released “at an appropriate time.”
“What China is doing to the world is unimaginable,” Mr Trump said on Tuesday. He meant novel Coronavirus.
So far, several key members of Mr. Trump’s economic team have expressed optimism about the trade deal. Trump has said he and U.S. Trade Representative Robert Lighthizer are pleased with China’s recent purchases. Mr Trump reiterated on Saturday that China was buying more American goods, and that it had been buying a lot of things.
The latest news on China-Us relations: the number of flights between China and the US will double
China and the United States will each allow airlines to double flights between the world’s two largest economies to eight a week, the U.S. Transportation Department said Tuesday.
The US Department of Transportation said it would allow four Chinese passenger airlines currently flying to the US to double their round-trip flights to eight a week. Meanwhile, China has agreed to allow American airlines to double their flights to the country.
After novel Coronavirus outbreak, American Airlines voluntarily suspended flights to China. On January 31, US President Donald Trump banned almost all non-US citizens from entering the country.
United Airlines said Tuesday it will increase its flights to China from San Francisco to Shanghai to four a week starting Sept. 4. The DEPARTMENT of Transportation also said Delta Air Lines flights could be increased from two to four a week.
Delta said in June that it would begin direct flights from Seattle and Detroit to Shanghai via Seoul in July. On Tuesday, Delta said it would add weekly flights from Detroit and Seattle to Shanghai via Seoul, starting Aug. 24.
The US transport Department said Washington still hoped China would agree to fully restore US flight rights under the bilateral aviation agreement, adding that as China allowed more flights, the US would respond in kind.
The agreement allows more than 100 flights a week between the two countries.
The US threatened to ban Chinese passenger flights in June after China did not immediately agree to resume American airlines flights.
In May, the Trump administration said Air China, China Eastern Airlines, China Southern Airlines, Hainan Airlines Holdings, And their subsidiaries must submit schedules.