The U.S. dollar index.DXY was little changed in Asian trading on Tuesday, trading near 93.55 after surging on Monday amid safe-haven buying. Spot gold is hovering around $1,910 an ounce, and prices fell sharply On Monday as the dollar surged. Investors are set to face a congressional hearing by Federal Reserve Chairman Colin Powell on Tuesday evening, Beijing time, which is expected to trigger fresh market volatility. For now, gold bulls are in the doldrums, but the price could still rebound in the event of new geopolitical tensions. India and China held their sixth round of military-ministerial talks on Monday. There has been no official announcement on the outcome of the talks. According to Indian media, the Indian side told China in the meeting to ensure complete disengagement and that the PEOPLE’s Liberation Army should take the first step.
Gold fell more than 3 per cent to its lowest level in more than a month on Monday as uncertainty over more US fiscal stimulus led to broader market selling and a stronger dollar. Spot gold closed Monday at $1912.23 an ounce, down $37.49, or 1.92 percent, after hitting its lowest level since August 12 at $1882.60 an ounce, down 3.4 percent.
George Gero, managing director of Royal Bank of Canada Wealth Management, said it was not surprising to see a lot of selling in the gold market because of a combination of factors. He noted that the threat of a second wave of blockades was dragging down economic growth, which in turn was dragging down the stock market.
Gero added that concerns are now more serious because investors are not holding out much hope for new stimulus measures to protect the economy. He added that if no new stimulus measures were announced, gold prices would continue to struggle. The price of gold has fallen nearly 10% from its all-time high in early August.
“Gold should be higher on safe-haven demand, but it’s a bit like a replay of the spring sell-off, where market participants have been selling across the board,” said Bob Haberkorn, senior market strategist at RJO Futures in New York. It’s just a lack of safe-haven buying, which comes after the stock market sell-off, and a stronger dollar is another weakness.” Wall Street’s main stock indexes fell to their lowest levels in nearly seven weeks on Monday.
Tai Wong, head of base and precious metals derivatives trading at BMO, said: “The chances of Congress agreeing on any stimulus package by January are getting close to zero. Gold needs to bounce back and close above $1,900 in the short term, but it looks like we may have to test the $1,863 low at some point in the near future.”
Congress has been deadlocked for weeks over the size and form of a fifth coronavirus response bill, which has already passed about $3 trillion and become law.
Edward Meir, an analyst at ED&F Man Capital Markets, said in a note that gold prices have been driven by successive rounds of stimulus and that the U.S. stimulus has stopped — at least for now — and appears to have halted the gold rally.
Ole Hansen, head of commodity strategy at Saxo Bank, said there was a risk that gold would plunge further if the euro fell below $1.17.
Investors are awaiting comments from members of the Federal Reserve board, including Chairman Colin Powell, that are expected to provide fresh guidance on the direction of the dollar and gold.
The latest news of china-India Military Ministerial Meeting! India tells China: PLA should take first step to ensure complete disengagement
New Delhi: India on Monday demanded that China withdraw its troops from “concrete and complete” “friction points” such as Pangong Tso, Chushul and Gogra-Hotsprings, and finalised a road map for de-escalation across the eastern Ladakh border, according to the Latest report in The Times of India on Tuesday.
On 29 August solstice 30, the Indian army gained bargaining chips by seizing tactical heights in the chushur area, on the south bank of bangong lake. On Monday, the Indian army reiterated its demand for restitution during the sixth round of military talks.
China and India held their sixth round of military-ministerial talks on Monday, with Lt. Gen. Harinder Singh, commander of the Indian 14th Army, meeting with Maj. Gen. Liu Lin, commander of the Southern Xinjiang Military Region, for the first time since August 2. The meeting began at 9:30 a.m. local time and continued into the night.
The Times of India reported that sources said the PEOPLE’s Liberation Army (PLA) had been told “to take the first step” as it had invaded Indian territory in several locations in early May, resulting in a stand-off and military build-up between the two sides.
According to The Times of India, the Indian side believes that there is “some disconnect” between the five-point diplomatic consensus reached by Indian Foreign Minister Sushil Jaishankar and Chinese Foreign Minister Wang Yi during their meeting on September 10 and the “actual situation” along the LAC.
A source said: “The PLA continues to strengthen its positions along the LAC. It does not seem ready to defuse the situation. Unless China agrees to make major concessions, it will be very difficult to achieve a substantive breakthrough.”
Up to now, neither China nor India has released official information on the outcome of the sixth round of china-India military-ministerial meeting.
According to Indian media reports last week, India may press The Chinese side to disengage and de-escalate tensions simultaneously in the eastern Ladakh region during a meeting between the two military commanders.
Indian and Chinese military representatives held the sixth round of military-level talks on the Chinese side of the Line of Actual Control (LAC) on The morning of June 21, local time, the Hindu reported Tuesday, citing an Indian military source. Chinese Foreign Ministry spokesman Wang Wenbin confirmed Tuesday afternoon at a regular press conference that the sixth round of military-ministerial talks is under way. If there is any information, The Chinese side will release it in a timely manner. He said that China and India have been in close communication on resolving the current border situation through diplomatic and military channels.
Indian media reported that, unlike in the past, The Head of the East Asia Department of the Indian Ministry of Foreign Affairs, Sneien, also attended the meeting, which was his first of its kind. According to Hindustan Times, Indian defense ministry officials had also previously joined the border affairs consultation and coordination mechanism under the diplomatic framework between the two countries to ensure the success of the talks.
China and India have been locked in a bitter border dispute near the Line of Actual Control (LAC) in eastern Ladakh since early May. In June, 20 Indian soldiers were killed in violent clashes between India and the People’s Liberation Army.
Since then, New Delhi and Beijing have engaged in a number of diplomatic and military exchanges. However, these meetings have yet to produce substantive results. The stand-off between the Chinese and Indian militaries on the border has escalated since warning shots were fired in early September.
Rajnath Singh, India’s defence minister, said on Thursday that the confrontation with China’s People’s Liberation Army had been caused by “interruptions in patrols”. Mr. Singh promised parliament that Indian troops would not retreat, and Indian border troops are now ready for long-term deployment in the border areas. “There is no force on earth that can stop Indian troops from patrolling the border areas,” Singh said, revealing that the army was seeking to resume all previous patrol points and return the LINE of Actual Control (LAC) to its April status.
As winter begins to grip the border with India and the weather turns harsh, the two countries are deploying large Numbers of troops along the border, along with military weapons including anti-aircraft missiles and ground-to-ground combat measures, and building strategic corridors.
New Delhi: The Indian military has accused the Chinese military of carrying out “provocative military activities” on the south bank of Bangong Lake from the night of August 29 to the early morning of August 30. On the evening of 29 and 30 August 2020, the People’s Liberation Army (PLA) took provocative military actions to change the status quo in violation of the consensus reached through military and diplomatic contacts during the previous standoff in eastern Ladakh, the Indian military said in a statement on 31 August.
Indian government sources confirmed on September 7 that Chinese and Indian troops opened fire during a confrontation near the Line of Actual Control (LAC) on September 7, the first time shots have been fired at the border between the two countries in decades. “India is committed to disengagement and de-escalation of the situation on the LINE of Actual Control, while China continues to take provocative actions to escalate the situation,” the Indian military said in a statement on September 8.
The Chinese Foreign Ministry has said on many occasions that China is not responsible for the recent border situation between China and India. It is the Indian side that comes first in violating bilateral agreements and agreements and important consensus, in illegally crossing the border line to provoke, in unilaterally changing the status quo of the border area, and in firing guns to threaten the safety of the Chinese border troops.
On September 8, Chinese Foreign Ministry Spokesperson Zhao Lijian held a regular press conference. Zhao lijian said that during the incident, the Indian side first fired threatening shots at Chinese border patrol personnel, which was the first time that the calm of the border between the two countries was interrupted by gunfire since 1975. China has repeatedly stressed that the two sides should resolve their differences through peaceful means and consultation and dialogue. Confrontation is not in the interests of either side.
According to the website of the Embassy of the People’s Republic of China in India on September 14, Ambassador Sun Weidong made remarks on recent media inquiries and bilateral meetings between Chinese and Indian foreign ministers. Referring to the consensus reached in previous meetings between the two leaders, Sun weidong said the two sides should “pursue win-win cooperation” rather than a “zero-sum game”.
Powell testifies before Congress
This week, Fed Chairman Colin Powell will testify before congressional committees, and Fed officials such as Messrs. Brainard, Evans, Bostick, Bullard, Daley and Williams will also speak publicly.
Federal Reserve Chairman Colin Powell and U.S. Treasury Secretary Steven Mnuchin will appear before the House Financial Services Committee Tuesday at 22:30 Beijing time.
This is the quarterly routine hearing required by the NOVEL Coronavirus Aid, Relief and Economic Security Act passed by the United States Congress in March this year, which allocates approximately $2 trillion to help accelerate the U.S. economic recovery. Powell and Mnuchin are likely to face questions about how they spent the bill’s money, and what more should be done.
Eamonn Sheridan, a market analyst, expects Powell to make a strong appeal for further policy support from Congress.
In his pre-release testimony on Monday, Mr Powell repeated earlier comments that more fiscal and monetary policy measures were needed to prevent long-term damage to the economy.