The dollar index was trading around 99.80 on Wednesday, with spot gold around $1,705 an ounce. On Wednesday night, investors will welcome ADP employment data, which is expected to show a sharp drop of more than 20 million jobs in April. If the ADP data turns out to be worse than expected, it could lead investors to hold more negative expectations for Friday’s nonfarm report, which could weigh on the dollar’s recent outperformance, while gold could surge even higher. Globally, the cumulative number of confirmed COVID 19 cases has exceeded 3.72 million. The cumulative number of confirmed cases in the United States has exceeded 1.23 million.
“Small non-farm” attack alert dollar selling
At 20:15 Beijing time on Wednesday, the U.S. ADP employment data for April will be released. The market expects the number of ADP jobs to drop by 20.5 million in April, compared with a previous decline of 27,000.
Wednesday’s “small nonfarm” ADP data could be a guide to Friday’s nonfarm report. If the ADP data perform poorly, it could add to investors’ negative expectations for Friday’s nonfarm report, which could weigh on the dollar.
The dollar rose against most major currencies for a third straight day Tuesday on reports that President Donald trump is planning another tax cut.
US President Donald trump is considering tax cuts for businesses in his next economic stimulus bill, the New York times reported. Mr Trump is considering cutting the capital gains tax in his next 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.
The dollar also rose on Tuesday after data showed a better-than-expected U.S. services sector report for April. The institute for supply management’s non-manufacturing index fell to 41.8 in April from 52.5 in March, but was above market expectations of 36.8.
The dollar index.dxy closed up 0.33 percent at 99.83 on Tuesday after hitting a high of 99.98 earlier in the day.
More economic data showing the impact of the global outbreak shutdown will be released this week, with the biggest focus undoubtedly on Friday’s U.S. nonfarm report for April.
Non-farm payrolls are expected to be the worst ever, with 22m jobs likely to be lost and the unemployment rate likely to soar to 16 per cent.
More than 30 million americans have applied for unemployment benefits in the past six weeks, and Friday’s non-farm payrolls data could shed more light.
“Attention will shift to the scale of the damage caused by the blockade,” said strategists at ING. On top of that, unemployment data will be released this week. Our team expects the April non-farm payrolls report to shed 21 million jobs, causing the unemployment rate to surge to 16%. “The may report could see a further 12 million jobs lost and the unemployment rate rise to 22 percent.”
Gold bulls are preparing to explode
Spot gold was little changed in Asia on Wednesday, trading around $1,705 an ounce. Spot gold prices held steady above $1,700 an ounce on Tuesday as a massive global stimulus to cushion the economic impact of a new pandemic offset an improvement in risk sentiment from the easing of restrictions.
Spot gold rose as high as $1,711.40 an ounce in intraday trading on Tuesday and dipped as low as $1,690.73 to close at $1,704.70, up $3.61, or 0.21 percent.
Analysts said that if Wednesday’s ADP jobs data were extremely weak, the resulting safe-haven buying could push gold higher still.
According to an article on Economies.com, a leading financial website, the four-hour chart shows gold hovering around EMA 50. The stochastic index gradually gains positive kinetic energy and comes close to providing a positive signal. With this in mind, we believe there is still a possibility for gold to continue its bullish trend within the day and in the short term, with the first target of $1,729.00 / oz. Once this level is breached, it will confirm gold’s move to the next main target of $1,747.43 / oz and higher of $1,780.00 / oz.
Economies.com cautioned that keeping gold above $1,678.45 an ounce is important for the metal to continue its expected rally. Economies.com expects short-term support and resistance from $1,680.00 and $1,730.00 an ounce.
The novel coronavirus pandemic has crippled economic growth worldwide and prompted governments to take fiscal and monetary measures to limit economic damage. More than 3.72 million people worldwide have been infected with novel coronavirus, of which more than 250,000 have died from covid-19.
Gold tends to benefit from broad stimulus from central Banks because it is widely seen as a hedge against inflation and currency depreciation.
“There is a lot of stimulus in the financial system,” said Edward Meir, an analyst at ED&F Man Capital Markets. So all of these are tailwinds for gold, which will be bought if it falls sharply.”
However, he added that as some global economies opened up, overall optimism should boost the dollar and put pressure on gold prices.
Analysts at Standard Chartered said in a report that gold continued to fluctuate around $1,700, with quantitative easing and unprecedented fiscal stimulus providing a positive backdrop.
In the latest update on the global outbreak, more than 3.72 million people have been infected worldwide. The United States has confirmed more than 1.23 million cases
According to the latest statistics, the global cumulative number of confirmed COVID 19 cases has exceeded 3.72 million. So far, there have been more than 100,000 confirmed cases in nine countries, including 1.23 million in the United States.
Worldometers world real-time statistics show that as of 9:11 PM Beijing time on May 6, global covid-19 cumulative confirmed cases of more than 3.72 million, reaching 3,726,664, cumulative deaths of more than 258,000, reaching 258,293. The United States had the highest number of cumulative confirmed COVID 19 cases in the world, with more than 1.23 million cases (1,37,633 cases) and more than 72,000 deaths (72,271 cases).
The White House is considering winding down its coronavirus task force in the coming weeks or months, a source told CNBC on Tuesday.
Vice President mike pence, who heads the task force, confirmed at a news conference Tuesday that the trump administration is in discussions to turn over the coronavirus response to other federal agencies. Pence reportedly said the administration is considering making the transition in early June.
Trump said recently that the COVID – 19 outbreak working group has done a good job, the task of a novel coronavirus is not complete, and the new shape of the outbreak working group will be about safety as well as restarting the economy. He noted that national institute of allergy and infectious diseases director Robert fauci and White House coronavirus response task force coordinator Eric berks will continue to be involved in the advisory work after the team is disbanded.
US President Donald trump on April 11 declared Wyoming a “state of major disaster” for the new outbreak. For the first time in U.S. history, all 50 states, Washington, d.c. and four overseas territories — the U.S. virgin islands, northern mariana islands, Guam and Puerto Rico — are in a “major state of disaster.”
Another major epidemic in overseas countries, Spain COVID – 19 accumulative total of 250561 cases of the patients, Italy has confirmed 213013 cases, the diagnosis of 194990 cases, confirmed 170551 cases of France, and Germany has confirmed 167007 cases, Russia has confirmed 155370 cases, Turkey has confirmed 129491 cases, Brazil has confirmed 115455 cases, Iran has confirmed 99970 cases, Canada has confirmed 62046 cases, confirmed 51189 cases of Peru, Belgium has confirmed 50509 cases, A total of 49,400 cases have been confirmed in India and 41,087 in the Netherlands.