International spot gold was trading at $1,566.50 an ounce in early Asian trading. The intraday rally accelerated abruptly, with gold up nearly $8 from a low and holding steady at an intraday high of $1,567.86.
Market analyst Sheridan noted that spot gold and the yen both rose sharply in the short term, but there was no new development on the news. Or that there’s a lot of news out there, but not a lot of updates.
Shanghai gold exchange gold T+D rose 0.79 percent to 347.87 yuan per gram in early Asian trading. Trading opened at 345.40 yuan per gram.
Gold T+D rose 0.45 yuan, or 0.13%, to 345.15 yuan per gram on Monday, with the highest bid at 345.67 yuan per gram and the lowest at 344.33 yuan per gram.
International spot gold, meanwhile, rose $6.66, or 0.43 percent, to $1563.96 an ounce at $1563.86.
US President Donald Trump will deliver a speech at the world economic forum annual meeting 2020 at 18:30 Beijing time on Tuesday. Mr. Trump is expected to address the prospects for the US domestic economy and trade disputes with the European Union.
Mr. Trump is back in the spotlight after missing Davos last year because of the government shutdown. In 2018, Mr. Trump used the Davos speech to signal his aggressiveness on trade, an early sign of global trade tensions.
After the US signed a first-phase trade deal with China last week, analysts say Mr. Trump’s next target will be the EU. The move means the trade dispute is heating up, giving trump’s speech extra prominence.
Analysts said that if Mr. Trump reignited the us-European trade dispute in his latest speech, it would add to risk aversion in the market and thus spur further gains in gold prices.
Technically, the daily chart shows a significant choppy uptrend in gold, which is currently above $1565 / oz, above the major moving averages. In terms of technical indicators, MACD green kinetic energy column showed initial appearance, RSI index hovered above 50, and KDJ random index rebounded from below 50.
On the four-hour chart, after hitting a previous low of $1,535 an ounce, gold resumed a volatile rally, briefly touching $1,567 an ounce, above its main moving average. Technical indicators, MACD red momentum column is very weak, RSI index pulled up from the level of 50, KDJ random index rebound close to overbought level.
Fundamentals favorable factors:
- At about 010:00 local time on January 21, Iraqi capital Baghdad green zone was hit by three rockets near the U.S. embassy zone and international coalition camps, air raid sirens went off. There were no immediate casualties.
2. The international monetary fund (IMF) on Monday lowered its global growth forecasts for 2019, 2020 and 2021, warning that the outlook for the global economy remains weak with no clear sign of turning the corner. The move comes after the IMF’s new managing director warned that the global economy risked sliding back into a depression, driven by inequality and turmoil in the financial sector.
3. At least 80 Yemeni soldiers have been killed and 150 seriously wounded in a missile attack on a base of government forces in maria province on Sunday.
4. Libyan protesters shut down an oil pipeline over the weekend, threatening to shut down the country’s largest oil field and exacerbating supply disruptions ahead of an international conference urging an end to Libya’s civil war.
Fundamental negative factors:
1.US President Donald Trump and his French counterpart Emmanuel Macron have agreed to continue negotiations on a digital tax until the end of the year, French diplomatic sources said on January 20. Mr. Trump has agreed to suspend tariffs until the OECD digital tax debate is over.
2. The German producer price index (PPI), released by the federal statistics office on Monday (20 January), was 0.1% in December, better than the previous reading and expected 0%.
3.On Friday, U.S. housing starts rose to an annualized total of 1.608 million units in December, the highest since December 2006, and a 16.9 percent monthly rate, the biggest monthly increase since October 2016.
4. The U.S. economy looks “pretty good” after federal reserve Tom Harker said on Friday that he expects the U.S. economy to grow 2 percent this year and data showing that the labor market is doing reasonably well. Slowing global growth, trade uncertainty, and geopolitical conflicts are holding back business investment.