Asian shares rallied on Tuesday as risk sentiment became more positive. Spot gold, under pressure after two days of losses, was trading below $2020, while silver fell sharply below the 29 mark.
The positive fundamentals for gold do not seem to have changed at the moment, with rising Tensions between China and the US, the spread of the epidemic and central Banks remaining accommodative, but the dollar’s sustained rally in recent days has kept gold’s gains in check and increased the risk of profit taking.
Mr Trump’s recent moves have pushed the dollar up from its lows, and the dollar index has regained some of the 4 per cent fall it lost in July.
President Donald Trump signed an executive order on Saturday partially reinstating enhanced unemployment benefits for tens of millions of unemployed Americans after negotiations in Washington over the next round of fiscal stimulus broke down. Meanwhile, the US announced sanctions against top Officials in Hong Kong and China, escalating tensions between the two countries.
In addition, U.S. President Donald Trump continued to wield the tariff stick on Monday. Mr Trump said there had been no discussion of removing tariffs on Brazilian ethanol and that if Brazil acted, the US would follow suit.
Trump also insisted in the press conference that US GDP growth would reach 20 per cent in the third quarter. He said there was no reason for the economy to grow less than 20 per cent in the third quarter.
Mr. Trump said new jobs were being created and the unemployment rate was falling faster than people expected. Over the past three months, we’ve created 9 million new jobs.
On the stimulus plan, Mr. Trump said the White House would talk to Democrats again about the stimulus plan. Earlier in the day, U.S. Treasury Secretary Steven Mnuchin said, ‘We are prepared to put an increase on the table.’
Mr Trump also said he would press ahead with more aggressive tax cuts, saying that “capital gains taxes are being looked at and payroll taxes for middle-income families are being cut” and that he intended to get rid of the payroll tax.
The news came after Mr. Trump’s briefing was interrupted by a shooting near the White House. US President Donald Trump was escorted out of the White House press briefing room by secret Service agents after a shooting broke out near the White House on Sunday evening.
Trump held a news conference in the briefing room that evening and was suddenly escorted away by secret Service agents. A few minutes later, Mr. Trump returned to the briefing room to continue his press conference. He said the shooting outside the White House, in which secret Service agents opened fire on an armed suspect, “seemed to be well under control.” The suspect was taken to a hospital in an unknown condition. No one else was injured.
As for the outlook for gold, the recent surge in prices came as the world’s largest gold ETF, SPDR GLD, with a total of $82bn, suffered $382m of outflows on Friday, the biggest since March.
State Street inc. ‘s SPDR Gold Shares, the world’s largest Gold ETF, saw $382 million in outflows on Friday, the largest withdrawal since March, data showed.
Todd Rosenbluth, director of ETF and mutual fund Research at CFRA Research, noted that no fund can accumulate inflows in a sustainable way, and the same is true for gold etfs. After massive inflows in 2020, investors inevitably chose to take profits.
On the daily chart, the U.S. dollar index.DXY was trading near 93.70 after two days of gains. The daily chart MACD red momentum column gradually expanded, and the KDJ random index continued to rebound above the 50 level, indicating strengthening bullish momentum for the DOLLAR or further advance.
On the 4-hour chart, the DOLLAR index.DXY continues to climb from its low of 92.50, rising close to its 100-session average. The MACD red momentum column held steady and the KDJ random index traded near overbought levels, indicating the dollar’s rally remained firm and a near-term warning for a pullback.
On daily charts, gold continued to come under pressure after two straight days of losses and is trading around $2,015. The daily chart MACD shows a gradual weakening of the red momentum column, with the KDJ random index trending down from the overbought level, indicating a lack of momentum or a pullback.
On the 4-hour chart, gold has gradually retreated from its peak of $2074 and is now moving lower and closer to its 50-period average support. The MACD green momentum column expanded sharply and held steady, while the KDJ random indicator continued to hit the oversold level, indicating that short term bearish pressure on gold is not abating, but oversold may bring stabilization.
On daily charts, silver rose 3 per cent yesterday before climbing above the $29 mark, which it slipped back slightly during the day. The daily MACD red momentum column gradually weakened, while the KDJ random index continued to trade at overbought levels, indicating silver bullish momentum weakened, or volatile downward.
In the 4-hour chart, silver is trying to hold its footing after hitting a high of $29.86. MACD green momentum column is weak, KDJ random indicator above the 50 level, indicating silver short term or continue to shock.
Fundamentals positive factors:
- Tensions between China and the United States have increased. On Monday, China announced sanctions against 11 U.S. politicians and human rights activists, including Senator Marco Rubio, in retaliation for U.S. sanctions imposed last week on 11 Chinese officials in Hong Kong and mainland China.
U.S. Treasury Secretary Steven Mnuchin announced Aug. 10 that companies from China and other countries that don’t follow accounting rules will be delisted from U.S. stock exchanges by the end of 2021.
- The United Nations Security Council is preparing to vote this week on a U.S. proposal to extend an arms embargo on Iran. Some diplomats say the move is doomed to failure and further endangers the fate of the nuclear deal between Iran and world powers.
- On the afternoon of August 10, local time, Trump abruptly interrupted a briefing on the epidemic. Minutes later, Trump returned to the news room and said there had been shots fired outside the White House.
Fundamentals negative factors:
- The BRICS Summit and the SCO Summit were scheduled to be held in St. Petersburg, Russia, in July this year. But the meeting was postponed because of the COVID-19 outbreak. Moscow is now planning to hold the meeting in October. Indian media analysis suggests that Indian Foreign Minister Sushma Jaishankar may visit Russia and attend the BRICS Foreign Ministers’ meeting next month. Chinese Foreign Minister Wang Yi will also attend the meeting, which may provide an opportunity for the Russian and Indian foreign ministers to meet separately to cool down the tension between China and India.
- SPDR GLD, the world’s largest gold ETF by value at $82bn, saw outflows of $382m on Friday, the biggest since March.
- A report from the Labor Department showed nonfarm payrolls rose 1.76 million in July, compared with a forecast for an increase of 1.6 million. A record 4.791 million units were added in June.
- Economic data released Thursday offered a mixed picture. Initial claims for jobless benefits fell for the first time in three weeks, labor Department data showed.