Investing in silver: prepare for the worst! Top fed official warns of worst nonfarm in history! Silver price narrow shock!

On Thursday (May 7), spot silver remained in a tight trading range, hovering around the $15 mark, with the focus on U.S. jobless claims last week.

Silver fell sharply last day and continued to fall above the $15 level before closing below it, down about 0.7% on the day.

As of 11:30 a.m. Beijing time on May 7, more than 3.82 million COVID 19 cases had been confirmed globally, with a total of 3,822,951 cases now confirmed and 265,084 deaths of more than 265,000, according to real-time data update website worldometers.

Among them, the total number of confirmed COVID 19 cases in the United States exceeded 1.26 million, with 1,263,183 cases, and the total number of deaths exceeded 74,000, with 74,807 cases.

The move comes as many countries, including Italy, Germany and the us, are tentatively unsealing, and risk sentiment is rising as more and more regions loosen their blockade.

However, dismal global economic data has left investors wary of restarting the economy.

A record 20.236 million private sector jobs were lost in April as an outbreak of novel coronavirus forced business shutdowns, clogging the U.S. economy and triggering a historic loss in the overall labor market last month.

The ADP report set the tone for Friday’s nonfarm payrolls report. At 20:30 Beijing time on Friday, April non-farm payrolls and the unemployment rate will be released. The previous number of new non-farm payrolls was -701,000, compared with -21m expected; The former unemployment rate was 4.4%, compared with market expectations of 16%.

“Safe-haven currencies are likely to do better as many prepare for the impact of the jobs data later this week,” said Joe Manimbo, senior market analyst at Western Union Business Solutions.

St. Louis federal reserve bank President James Bullard said Wednesday that the April nonfarm payrolls report, due Friday, could be one of the worst in U.S. history, but noted that was expected.

“The unemployment rate will be very high, probably higher than 20 per cent,” said Mr Bullard, who said he still believed the main impact of the crisis would be in the second quarter. The third quarter will be a transition period, but I expect relatively fast growth. Hopefully by the fourth quarter we will have completed our rapid growth process.”

Mr. Bullard also on Wednesday called for a gradual restart of the U.S. economy to avoid further damage. “The shutdown cannot go on forever,” he said. “if it goes on into the second half of the year, I think there is a risk of a deep financial crisis or even a great depression, and if it comes to that, then the health outcome will be worse.”

“Our advice is: prepare for the worst because we could see the biggest monthly job losses on record,” said Jeffrey Cleveland, chief economist at Payden & Rygel.

“It’s not like in 2008, and it’s not like in the 1930s, when most unemployment was permanent and there was a painful, slow process of reallocating labor to new areas,” he said. “If the recent rise in unemployment is temporary, then the economy may rebound more quickly.”

In the current session, investors will welcome U.S. jobless claims data at 20:30 Beijing time on Thursday. Initial U.S. claims for jobless benefits are expected to be 3 million in the week ended May 2, according to a respected media survey.

New claims for state unemployment benefits rose to 3.838 million in the week ended April 25 from 4.427 million, above expectations of 3.5 million, labor department data showed on Thursday.

Technical analysis

The dollar

On the daily chart, the dollar index in 4 consecutive days after the rise of the high consolidation, has broken through the 100 mark, trading around 100.10, on all major averages. From the technical point of view, MACD green kinetic energy column weakened nearly disappeared, RSI index hovering around 50, KDJ random index to rise above the 50 level, there is still rebound space.

On the 4-hour chart, the dollar index is still in the midst of a strong rally since 98.77, with the key 100 level already above all major averages. MACD red kinetic energy column began to weaken, KDJ random index hit the overbought level, short – term may be a small correction.

silver

On the daily chart, silver still maintains the momentum of the previous few days of narrow trading, trading around the $15 level, below the key 50-day moving average resistance. The MACD green kinetic energy column is very weak, the KDJ random index fell below the 50 level and still faces further downward pressure.

On the 4-hour chart, the silver price is still in the wide range between the 100-period moving average and the 200-period moving average. MACD red kinetic energy column steady, KDJ random index hovering near the 50 level, short or continue to shock.

fundamentals Positive factors :

  1. According to statistics from real-time information and data update website world meters, as of 11:30 on May 7, Beijing time, there were more than 3.82 million confirmed cases of COVID 19 worldwide, with a total of 3,822,951 confirmed cases and 265,084 deaths of more than 265,000.
  2. Us data released on Wednesday showed employment at ADP, known as “small non-farm”, fell by 20.236 million, the worst performance on record, and the total number of jobs lost in just one month was more than double the total loss during the great depression. The ADP report set the tone for Friday’s non-farm payrolls report, which is expected to show a 21.5 million decline in April.
  3. Federal Reserve official James Bullard said Friday’s April jobs report is likely to be one of the worst in U.S. history.
  4. We are in the midst of a recession, but the economy may begin to recover in the second half of the year, said federal reserve vice-chairman Peter Clarida. We are experiencing the most severe contraction in economic activity and a surge in unemployment, which will soar to its highest level since 1940.

Fundamental negative factors:

  1. US President Donald Trump tweeted that the White House task force on the new outbreak response would work indefinitely, but that the new focus would be on security and restarting the economy.
  2. House Democrats are pushing a massive fifth round of novel coronavirus rescue legislation, in what could be their most far-reaching effort yet to deal with the economic impact of a pandemic, with a multi-trillion-dollar stimulus package in the works. The cost could match or exceed the $2.2 trillion CARES act passed in March.
  1. U.S. vice president Mike Pence said the White House is in discussions to disband the task force on the new outbreak and possibly transfer the response to FEMA.
  2. According to the New York Times, US President Donald Trump is considering tax cuts for businesses in his next economic stimulus bill. Mr. Trump said payroll and capital gains taxes should be considered, and liability guarantees and business tax breaks for restaurants and entertainment venues must be considered.

Leave a Reply

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