Investing in silver: the “Draghi” attitude! The federal reserve has a big gun bigger than the financial crisis. Silver jumped 6%!

As gold surged on news of the fed’s “big gun” in the financial crisis, silver followed suit, rising more than 6 percent to above $14 on the day and as high as $14.11.

Silver rallied from two days earlier to close at $13.27 after overcoming the key $13 barrier, up more than 5% on the day.

Now the COVID 19 epidemic is spreading around the world, showing a worsening trend in Europe and the us, with more than 10,000 new cases confirmed in the us in 24 hours and the number of deaths in a single day exceeding triple digits for the first time.

According to real-time statistics from Johns Hopkins university in the United States, as of 11:00 am Beijing time on April 24, the global total of covid-19 cases was more than 380,000, and more than 46,000 in the United States.

The United States now has the third highest number of confirmed cases in the world, after China and Italy. So far, none of the 50 states or Washington, d.c. New York state alone has more than 20,000 confirmed cases, the most in the country.

On March 23, Thomas bossert, a former assistant to the President of the United States for homeland security and counterterrorism, warned that the United States could soon have the highest number of confirmed COVID 19 cases in the world. He says now that the number of confirmed cases has shown that the United States could soon become the world’s country with the most novel coronavirus cases.

The federal reserve’s unprecedented effort to provide credit support to various sectors of the economy has eased investors’ concerns about a rapidly spreading outbreak of novel coronavirus.

After recently cutting interest rates to near zero, the fed will lend to small businesses against student loans, credit card loans and U.S. government-guaranteed loans, buy large corporate bonds and offer bridge loans for up to four years.

The fed also said it would expand its asset purchases as much as possible to stabilize financial markets. The moves mark an expansion of the fed’s massive intervention beyond financial markets, where it has so far focused its firepower.

“We are once again in a state of infinite easing,” Peter Boockvar, chief investment officer at Bleakley consulting group, said in a report.

Daniel Wiener, an investment consultant who runs investor news for pilot group, said the fed was clearly stepping up to do what was necessary at a time of political paralysis. “The fed came out because the house, the senate and the White House have been unable to figure out what to do.”

Investors had hoped the U.S. Senate would approve a more than $1 trillion stimulus package over the weekend. But Democrats and Republicans failed to reach an agreement. The $2 trillion packages failed to pass the Senate on Monday after Democrats said it provided too little money to states and hospitals and not enough to limit a fund to help big business.

Tai Wong, head of fundamental and precious metals derivatives trading at mandi bank, said: “the fed has pulled out its biggest cannon so far – even bigger than during the financial crisis. Markets reacted immediately, with stocks and gold prices soaring after the fed adopted a new ‘draki-style’ approach. But the big test now is whether that optimism will last more than a day.”

Technical analysis:

The dollar

On the daily chart, the dollar index continued to fall from its highs, losing the key 102-point level on the day and hitting a low near 101.65, down nearly 100 points on the day but still above its main moving average. On the technical side, the MACD red kinetic energy column began to weaken, the RSI index from the overbought level down, the KDJ random index is still in the overbought level area, suggesting that the price may fall slightly.

On the 4-hour chart, the dollar index continues to consolidate at high levels and is currently winding around the key 20-point moving average. In technical terms, MACD green kinetic energy column continues to expand, RSI index hovering around the 50 level, KDJ random index fell below the 50 level, short or down.

silver

On the daily chart, silver continues to rally after hitting a low of $11.62 and is now heading for a four-session rally, with an eye on whether it can close above the key $14 level for the day. From the technical perspective, the MACD green kinetic energy column is gradually shrinking, the RSI index rebounded from the oversold level, and the KDJ random index also rebounded from the oversold level and is expected to go higher.

On the 4-hour chart, silver appears to have formed a short-term bottom around $11.62 and is now in a sustained rally from that level, with prices currently testing the key 60-point moving average to see if they can get there. In technical terms, the MACD red kinetic energy column continued to expand, KDJ random index hit the overbought level, focus on the possibility of consolidation.

fundamentals Positive factors :

  1. As of 6:16 p.m. Et on March 23, there had been at least 43,214 confirmed cases of COVID 19 in the United States, including 533 deaths, according to the Johns Hopkins real-time surveillance system. Us states reported more than 100 new deaths on March 23, the first time since the outbreak began that the number of deaths in the us has risen to triple digits in a single day.
  2. On Monday, the federal reserve said it would roll out a series of programs aimed at helping markets function more efficiently in a novel coronavirus crisis. One was a pledge to continue its asset-purchase programme.
  3. The third round of emergency economic aid proposed by republicans failed to pass the Senate on March 23.
  4. The number of confirmed cases of a novel coronavirus in the United States stood at 33,073 as of 8:43 p.m. Edt, with 416 deaths and 178 cures, making it the third most confirmed country in the world, according to Johns Hopkins University. Meanwhile, a total of 59,000 has been diagnosed in Italy.

Fundamental negative factors:

  1. Holdings of SPDR Gold, the world’s largest listed Gold exchange-traded fund, fell 1.5% to 908.19 tonnes on Friday.
  2. February, March 23. Treasury Secretary Steven mnuchin recently said he was close to a deal on a stimulus bill.
  3. The European central bank’s announcement of a €750 billion ($817 billion) asset-purchase program to combat the outbreak of the coronavirus spurred risk sentiment.
  4. According to a Treasury memo obtained by the Washington Post, the Treasury’s covid-19 stimulus plan is aimed at $1 trillion, including $2,000 in checks for Americans. The plan could also include $300 billion to help small businesses avoid mass layoffs.

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