The DOLLAR index.DXY continued to come under pressure in Asian trading on Thursday, trading near 93.20. Spot gold was little changed at around $1,945 an ounce, with prices briefly breaking through the $1,950 an ounce barrier in early trading. Geopolitical factors have put the market in a risk-off mood, which is positive for gold. At a time when the China-India situation is under intense scrutiny, investors need to be wary of further escalation. The US has revoked the visas of more than 1,000 Chinese nationals to prevent entry of “students and researchers with links to the Chinese military”, a state Department spokesman said, in a move likely to further exacerbate tensions between the two countries. On Thursday night, Beijing time, investors will be greeted with a decision from the European Central Bank on monetary policy, which is expected to trigger moves in the euro, the DOLLAR index and gold prices.
Gold briefly topped $1,950
Gold closed higher on Wednesday as investors worried about a delay in the development of the novel Coronavirus vaccine and tensions between China, the United States and India boosted the safe-haven metal. Gold prices extended gains in early Asian trading on Thursday, briefly topping $1,950 an ounce.
The dollar slipped from a four-week high on Wednesday after reports that European Central Bank officials were more confident about the outlook for the euro zone’s recovery. A weaker dollar boosts gold prices.
Bob Haberkorn, senior market strategist at RJO Futures in New York, said the dollar took some hit after the European Central Bank painted a slightly upbeat outlook and gold moved higher.
In addition, a global trial of AstraZeneca’s experimental Novel Coronavirus vaccine was halted due to an unexplained illness in a study participant.
News of the delayed vaccine trial could be indirectly supportive for gold prices as it could lead to a prolonged economic slowdown and further expectations of fiscal stimulus, said Saxo Bank analyst Ole Hansen.
“From a technical point of view, we need gold to close above $1,950 an ounce for the bulls to take control,” Haberkorn said.
Bart Melek, head of commodity strategy at TD Securities in New York, said that while the dollar has room to rise, strong fundamentals will continue to support gold. He added that he expected gold to continue to hold support at $1,920.
George Gero, managing director of Wealth Management at Royal Bank of Canada, said he remains bullish on gold in the near term as increased market uncertainty could push prices higher in line with the dollar.
Julius Baer analyst Carsten Menke said gold was supported by prolonged market uncertainty.
So far this year, gold has risen about 28% as central Banks around the world have built ona raft of unconventional stimulus measures to offset the economic damage caused by the novel Coronavirus pandemic. Gold is considered a hedge against inflation and currency depreciation.
“All central Banks are in the same boat,” said Edward Meir, capital markets analyst at ED&F Man. They’re going to have to keep printing money and keep easing policy to counter the recession we’re in, “which would provide support for gold.
New information has come from the situation between China and India
Indian and Chinese military representatives met On Wednesday to amicably defuse tensions on the Line of Actual Control in eastern Ladakh, but the talks were “fruitless,” according to Indian media IANS. The two militaries will meet again for further discussions.
On September 7, the talks followed a provocative military action by the PEOPLE’s Liberation Army, which chased Indian soldiers from positions on the Line of Actual Control and fired warning shots, according to IANS.
“The two brigade commanders had a meeting today,” the source said on Wednesday. The source added that they still have not reached a conclusion.
The sources further said that India made it clear during the talks that it would retaliate if The Chinese military took provocative military actions. Earlier On Wednesday, the Chinese military was spotted starting a new buildup in the Finger region north of The Lake. In order to distinguish the complex terrain on the northern shore of The Lake, India named the extended ridge as Finger and divided it into regions from Finger 1 to Finger 8.
The PLA’s deployment has increased since Tuesday night. They also brought more supplies and logistics. The troops on both sides were very close together. “They are clearly visible and the Indian army is watching their activities closely,” a government source said.
Also on Tuesday, about 40 to 50 Chinese soldiers armed with spears, guns and sharp weapons reached a few meters away from Indian army positions north of Rezang La in eastern Ladakh. The PLA tried again to dislodge the Indian troops from their positions.
Indian government sources confirmed on Monday 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 disengaging and de-escalating 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 released on Tuesday.
In a statement, the Indian military said it had not crossed the LINE of Actual Control at any time and had not used any offensive means including firing. Instead, the Indian military statement said, “it is the FLAGrant violation of the agreement and aggressive actions of the PLA at the same time that military, diplomatic and political contacts are still going on.”
Indian troops have occupied key highlands near the southern bank of Lake Banguong, and Chinese troops have made repeated attempts to take Indian positions here. This has become a new point of friction as the Indian army appears to be in a strong position.
India and China have been locked in a four-month standoff along the Line of Actual Control (LAC) in eastern Ladakh. Despite several rounds of talks, no breakthrough has been achieved and the impasse continues.
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 India Today on Wednesday, senior Indian government sources said That Chinese forces were conducting firing exercises in Tibetan territory they control, but that they were heard in many places from Ladakh to the Line of Actual Control (LAC). China’s attempt to conduct the firing exercise appears to be an attempt to create psychological pressure on Indian troops deployed on the LAC.
A brigade under the Xizang Military Region recently organized multi-type main battle equipment to conduct a multi-type live-fire drill at an altitude of more than 4,900 meters.
New Delhi: India has strengthened its defence positions held by Indian troops near the Rezang La and Rechin La highlands and warned Chinese troops of consequences if they tried to undermine India’s defences, sources said.
Sources said the issue of Chinese soldiers deploying close to Indian positions with machetes and spears was also raised during talks between Brigade commanders of the two sides, India Today reported.
The Chinese army has deployed nearly 50,000 soldiers as well as heavy tanks and artillery, sources said. Opposite the Indian side of Chushur, the Chinese military has been lining up tanks and infantry fighting vehicles in the territory near the friction area and has brought a lot of heavy weapons to the area, the sources added.
New Delhi: Indian Foreign Minister Sushil Jaishankar will meet his Chinese counterpart Wang Yi in Moscow on Thursday to discuss the border situation.
On September 7, local time, su jieseng said that the border situation between China and India and the relationship between the two countries “cannot be decoupled”, believing that the current tension between the two countries on the border may affect China-India relations. He also said the two sides needed to have a “very, very in-depth dialogue” at the political level on the current border situation.
Sino-us situation: The US says it has revoked the visas of more than 1,000 Chinese nationals
The United States has revoked the visas of more than 1,000 Chinese nationals as of this week, a State Department spokesman said on Wednesday. The move is part of the Trump administration’s efforts to block the entry of Chinese students and researchers whom the U.S. believes have ties to the Chinese military.
In an announcement on May 29, US President Donald Trump announced restrictions on certain Chinese students and researchers entering the US, saying they were being used by China to acquire sensitive US technology and intellectual property. The State Department began implementing the rules on June 1.
“As of September 8, 2020, the State Department has revoked the visas of more than 1,000 Chinese nationals, who were found to be eligible for visas under Presidential Proclamation 10043,” a STATE Department spokesman said in emailed comments to Reuters.
The spokesman said the State Department has broad powers to revoke visas and to exercise this power when it learns that a visa holder may not be allowed to enter the United States or otherwise not qualify for a visa. She did not give details of the visa revocation.
Earlier Wednesday, dozens of Chinese students studying at U.S. universities said they had received email notifications from the U.S. Embassy or consulate in Beijing informing them that their visas had been canceled.
The roughly 360,000 Chinese citizens who attend schools in the United States generate about $14 billion a year in economic activity, much of it from tuition and other fees. U.S. officials say the visa measures affect a small number of students.
“We continue to welcome legitimate students and scholars from China as long as they do not advance the communist Party’s goal of military rule,” the spokesman said.
In recent months, Chinese students and researchers have been targeted in the United States. The University of North Texas in the US has abruptly expelled 15 Chinese government students and ordered them to leave the country within a month.
On September 5, local time, the BBC reported that Chinese students had been subjected to harsh scrutiny by US customs.
On the issue of Chinese students studying in the United States, Chinese Foreign Ministry spokesperson Hua Chunying stressed on September 1 that since the establishment of diplomatic ties 41 years ago, cultural and people-to-people exchanges between China and the United States, including exchanges between Chinese students, are of great significance and have played an important and positive role in enhancing mutual understanding and understanding between the two peoples and promoting the steady development of China-Us relations. Over the years, Chinese students and scholars have made important contributions to technological innovation and economic development in the United States. According to relevant data from the US side, Chinese students in the US account for one third of the total number of students studying in the US and contribute more than 15 billion US dollars to the US every year.
The recent strengthening of the euro is causing concern among European policymakers. They said the euro’s rise against the dollar and many other currencies could hamper the euro zone’s economic recovery, making it more dependent on global markets amid weak domestic demand, while a stronger euro would put pressure on euro zone exports and further hurt consumer prices.
Some in the market have speculated that the European Central Bank may take verbal intervention and other measures to combat the euro’s recent rise to further aid Europe’s economic recovery.
Shaun Osborne, chief currency strategist at Scotiabank in Toronto, said: “This comes after ECB officials said earlier that the euro is again in the ECB’s sights. If they are more confident about the economic outlook, that means they may be less worried about the exchange rate.”
In addition to the euro’s rise, investors need to keep an eye on the impact of the Fed’s introduction of an average inflation target on the European Central Bank.
The ECB began a review of monetary policy strategy earlier this year to echo the Fed’s move, but the review has stalled as officials focus on fighting the epidemic crisis. The Fed’s conclusions may now give the ECB an incentive to think harder about its approach.