The DOLLAR index hovered around 94.35 in the Asian session on Friday. Spot gold rose modestly to around $1,868 an ounce, with prices briefly topping $1,870 in early Asian trading. As the dollar has retreated from its highs, gold bulls have found breathing space, analysts said. Moreover, geopolitics remain supportive of gold prices. Regarding the situation across the Taiwan Strait, Taiwan officials have confirmed that PLA aircraft have flown in the airspace around Taiwan for the seventh time in the past eight days. In addition, the situation between China and India has also been updated. India has informed The Chinese side of its intention to shoot.
Gold prices closed higher on Thursday for the first time in four sessions as the dollar retreated, with spot gold closing at $1,867.26 an ounce. Gold’s recent fall to a two-month low has also made it more attractive for bargain hunters.
Gold prices rebounded on Thursday to above $1,860.90 an ounce and are expected to rise further in the coming trading sessions, according to an article published on Friday by Economies.com. Gold closed above $1,860.90 an ounce on Thursday, pushing it to test the $1,901.80 area.
Gold prices have come under selling pressure since the start of the week as buying was weighed down by an increasing number of novel Coronavirus cases in Europe and the US prompting investors to unwind gold and silver bets and switch to the US dollar. As a result, the dollar’s retreat has helped fuel a rebound in gold prices.
The dollar.DXY hit a two-month high of 94.61 intraday on Thursday, but gave up gains to close near 94.35.
Chintan Karnani, chief market analyst at Insignia Consultants, attributed the rise to a “short-covering rebound” under “oversold conditions”. He added that “pre-election jitters” would ensure gold’s weakness did not last long.
“The broader market has become too complacent, so interest in gold will naturally increase,” said Jeff Wright, executive vice President of GoldMining Inc. He stressed that it was not a single factor but “multiple factors leading to buying”, including oversold conditions.
After falling to a two-month low this week, gold could rise above $2,000 an ounce and hit a new high before the end of the year as the precious metals market still underestimates the risk of the U.S. election, according to a report from Citigroup.
In a quarterly outlook for commodities, Citi analysts wrote that uncertainty surrounding the November 3 US election, including a possible disputed election outcome, could be “underpriced by the precious metals market”. That would mean gold would have to rise more than $200 from its current level.
“Gold bulls need fresh fundamental information to restart the recent upward trend in gold prices,” said Jim Wyckoff, senior technical analyst at Kitco.com.
Looking ahead, George Gero, managing director of RBC Wealth Management, said while he is bullish on gold, he does not see it breaking $2,000 resistance any time soon. “There are enough problems in the world to push gold higher, but because the Fed is not considering new stimulus measures,” he said. Gold is not ready to break out of that range.”
Adrian Day, President and CEO of Adrian Day Asset Management, said he is bullish on gold. “There must be enough things in the world to support gold, especially the extremely loose policies of the world’s central Banks,” he said.
India has told China that its troops will open fire in these circumstances
According to a senior Indian government official, China has been told that if it tries to take over outposts or besige Indian troops, they will open fire and there will be no more primitive fighting with batons or stones on the Line of Actual Control (LAC), the Economic Times reported on Friday.
According to the report, the Indian army has given clear instructions to troops at frontier outposts to shoot if they face hostile action, such as an attempt to overrun the outposts, or a large-scale attack by PLA soldiers using batons, spears or other improvised weapons.
“The message they are getting is that pushing and shoving will no longer be tolerated,” said one official, who asked not to be named. The message they got was that the original weapon was no longer usable. That has been communicated to them.”
Although there have been several exchanges of fire between Chinese and Indian troops on the south and north sides of The Lake, warning shots were fired and no casualties have been reported. The official said only small arms were used, not large-caliber weapons.
Officials also said the clashes in Galewan were unfortunate, but it was the first time in decades that the Chinese had lost soldiers in combat. This is a clear message to the PLA: “India will protect the border at all costs”.
In diplomatic talks, China admitted that at least five people had been killed or wounded in the clashes, including the commander of a PLA battalion, the official said in detail. The official said the actual number of PLA casualties could be several times higher.
China and India held their sixth round of military-ministerial talks on Monday on the Chinese side of the Line of Actual Control (LAC) border. Lt. Gen. Harinder Singh, commander of India’s 14th Army, met with Maj. Gen. Liu Lin, commander of the Southern Xinjiang Military Region, for the first time since August 2.
On Monday, India demanded that China withdraw its troops “specifically and completely” from “friction points” such as Banguong Lake, Chushur and Gogra-Hot Springs, and finalize a road map for de-escalation across the eastern Ladakh border, the Times of India reported on Tuesday. The people’s Liberation Army (PLA) has been told “to take the first step” as it invaded Indian territory in several locations in early May, resulting in a stand-off and military build-up between the two sides, sources said.
Chinese Defense Ministry spokesman Wu Qian said on September 21 that the sixth round of military-level talks between the Chinese and Indian militaries was held at the meeting station of the Moldo border talks. By mutual agreement, jointly issued a joint press release, the content is as follows: on September 21, the sixth month level talks between the two armies, both sides around the region stability control sino-indian border ShiKongXian frank and in-depth exchange of views agree to earnestly implement the important consensus reached by the leaders of the two countries, strengthen the communication field, to avoid misunderstanding, stop to send more British troops to a line, not only changes in situ, avoid taking any action that could complicate the situation. The two sides also agreed to hold the seventh round of military-to-military talks as soon as possible, take practical measures to properly handle local issues and jointly safeguard peace and tranquility in the border areas.
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. 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.
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.
The situation in the Taiwan Strait: PLA aircraft have operated in the airspace around Taiwan for the seventh time in eight days
According to Taiwan media reports, Taiwan’s defense ministry released a message that the PEOPLE’s Liberation Army (PLA) military aircraft re-entered the southwest Taiwan airspace on September 24. It was also the seventh time in eight days that PLA aircraft had flown in airspace around Taiwan.
Taiwan’s Freedom Times reported that the airspace around Taiwan has been “normalized” by Chinese PLA aircraft. According to the information recorded by Taiwan’s defense department, the airspace southwest of Taiwan’s Air defense Identification Zone has been “harassed” again by a Chinese Y-8 aircraft during the day. In accordance with the usual practice, the Taiwanese army dispatched air patrols, emergency take-off and other forces to respond and broadcast the evacuation, and pursued the surveillance through various anti-aircraft missiles.
On September 17, the Taiwan Defense Ministry set up a “real-time military dynamic” zone on its official website to announce the latest developments in the air and sea around Taiwan. According to the zone’s records, as of April 24, there were only 20 records of PLA aircraft operating in the airspace around Taiwan. In other words, in the eight days between September 17 and September 17, PLA aircraft have operated in airspace around Taiwan for seven days. Several PLA warplanes crossed the Taiwan Strait twice on September 18 and 19.
For days, the People’s Liberation Army has been conducting exercises across the Taiwan Strait, while the Taiwanese Air force has been conducting “joint exercises” without warning. Eight F-16 fighter jets took off from the Hualien base early in the morning to play imaginary enemies to test the reaction and “readiness” of Taiwan’s air defense forces, According to Taiwanese media. The fighter jets of each wing were scrambled at 5:30 am to simulate “response to combat” and “control enemy air attack”.
According to Taiwan’s United Daily News, the PLA also sent two anti-submarine aircraft carrying 8 into Taiwan’s southwest Air Defense Identification Zone on March 21 and 22, respectively. On May 19, two H-6 bombers, 12 J-16 fighters, two J-11 fighters, two J-10 fighters and one Y-8 anti-submarine aircraft entered the southwest and northwest airspace of Taiwan and crossed the middle line of the Taiwan Straits.
Two H-6 bombers, eight J-16 fighters, four J-11 fighters and four J-10 fighters “harassed” Taiwan on the morning of October 18, 12 of which crossed the mid-line of the Sea and FJG. A total of two anti-submarine aircraft carrying 8 entered the southwest Air Defense Identification Zone (ADIZ) over Taiwan on July 17.
At a regular press conference on Sept. 21, Chinese Foreign Ministry spokesman Wang Wenbin said Taiwan is an inalienable part of China’s territory and there is no such thing as a “middle channel” in response to allegations that PLA warplanes flew over Taiwan. Taiwan media said this should be a direct and public statement rarely seen by the mainland authorities in many years, and it may become normal for military aircraft, ships and even civilian fishing boats from the mainland to cross the “Middle Line” in the future.
Taiwan United News Network reported on September 22 that Li Jie, former head of Taiwan’s defense department, published the exact coordinates of the “middle line” for the first time in May 2004 during a consultation with Taiwan’s legislature, as evidence of cross-strait activities in their respective areas.
Taiwan said on Monday its armed forces had the right to defend themselves and strike back in the event of “harassment and threats,” Reuters reported on Monday. This is clearly a warning to Mainland China.
Tensions between Taipei and Beijing have risen sharply in recent months. Beijing claims Taiwan as its territory and USES force if necessary.
Taiwan’s defence ministry said in a statement that it had a “clearly defined” procedure for its first response to “frequent harassment and threats by enemy warships and aircraft this year”. The defence ministry said Taiwan had the right to “defend itself and strike back” and followed a policy of “avoiding escalation of conflict and not triggering incidents”. It added that Taiwan would not stir up trouble but was “not afraid of the enemy”.