January 27-January 31 overview: spot gold rose $15 on Friday, rising as much as $20 to hit $1,590.20 an ounce, its highest since January 8. Gold posted a 4.75 percent gain in January, its best monthly performance in five months. An outbreak of pneumonia linked to a new coronavirus, analysts say, exacerbated concerns and led to a sharp sell-off in U.S. stocks, which posted their worst monthly performance since August, with the s&p 500 down more than 3 percent from its all-time high on January 17. The plunge in risk assets, no doubt to promote the market capital flows into safe assets.
Spot gold opened the week at $1,570.37, with a high of $1,590.20 and a low of $1,562.70 before settling at $1,588.70, up $17.50, or 1.11%.
“I think we’re going to see continued concern about the coronavirus,” said Phil Flynn, senior market analyst at Price Futures Group in New York.
Technical 4 hour chart, spot gold once show a potential double top form, but in the end, the male thread, and broke through the recent consolidation triangle pattern, under the impetus of the cycle index averages 50 constitute a bullish momentum, as long as the stabilization of $1575.90 the line above the trend line average but gold is expected to further look at $1611 on a high. After all, with the outbreak scare and continued inflows of gold ETFs, gold prices should hold up.
Who has declared the coronavirus outbreak a global emergency
Countries WeiJianWei on February 2, the latest report shows that February 1 0-24, 31 provinces (autonomous regions and municipalities directly under the central government) and the Xinjiang production and construction corps report new confirmed cases, 2590 cases (1921 cases), Hubei province, and severe cases 315 cases (268 cases), Hubei province, the new death cases of 45 patients (45 cases), Hubei province, the new hospital cured cases 85 cases (49 cases), Hubei province, the new suspected cases 4562 cases (2606 cases) of Hubei province.
As of 2:00 am on February 1, the national health commission had received a total of 14,380 confirmed cases from 31 provinces (autonomous regions and municipalities directly under the central government) and the Xinjiang production and construction corps.
So far, a total of 163,844 people with close contacts have been traced, and 8,044 people have been released from medical observation on that day, with a total of 137,594 people under medical observation.
A total of 31 cases have been reported from Hong Kong, Macao, and Taiwan: 14 from the Hong Kong special administrative region, 7 from the Macao special administrative region and 10 from the Taiwan region.
The world health organization declared the coronavirus outbreak a global emergency on Thursday because of the spread of the disease, but it opposes restrictions on travel or trade with China and says it believes the country can contain the outbreak.
In addition, according to People’s Daily, on the afternoon of January 31, the White House held a press conference on the new coronavirus outbreak, and the US secretary of health and human services Alex Azar declared the new coronavirus outbreak to be a public health emergency in the US.
He also announced that foreigners who have visited China in the past 14 days (other than U.S. citizens and immediate family members of permanent residents) will be temporarily barred from entering the country starting at 5 p.m. Est on February 2.
Starting Feb. 2, any U.S. citizen who has visited China’s Hubei province in the past 14 days will be subject to mandatory quarantine for up to 14 days, U.S. officials said at the briefing.
U.S. citizens who have visited other parts of mainland China in the past 14 days will be screened for entry, monitored for up to 14 days and quarantined.
The US also plans to centralize all flights from China to seven airports in New York, Chicago, San Francisco, Los Angeles, Seattle, Atlanta, and Honolulu.
“Gold prices continue to be supported by the virus and its potential to have a negative impact on the global economy,” Saxo Bank analyst Ole Hansen said.
“However, while the coronavirus uncertainty is affecting other markets, such as equities, gold is still unable to rise due to a lack of new buying.”
The outbreak weakened the impact of the fed’s decision but slightly dovish comments still weighed on the dollar
The only change in the fed’s assessment of the economy was the recognition that growth in household spending had slowed from “robust” to “moderate”, and the only change in policy was the view that the current stance was consistent with a “return” to the target level of inflation, rather than a previous “close” target. Overall, it was slightly dovish, with the dollar index down slightly, providing some support for gold.
Mischler Financial, a broker-dealer, said the FOMC statement had done nothing to boost the outlook that the fed would deviate from its current target of holding its key policy rate steady this year. The fed is expected to remain on the sidelines for the rest of the year. The FOMC statement also made no mention of public health events, which have been underpinning demand for treasuries recently. Although fed chairman Colin Powell will be asked about the issue at an upcoming news conference. Markets are still considering the risks of easing concerns.
The Wall Street Journal said the expected increase in the excess reserve requirement ratio (IOER) was seen by some as the standard for the fed to maintain control over short-term interest rates, but most saw the IOER adjustment as technical.
Before the FOMC statement, CME fed watch showed that there was an 84.0% chance of keeping rates in the 1.50%-1.75% range by march, a 3.9% chance of a quarter-point cut, a 12.2% chance of a quarter-point rise and a 0% chance of a half-point rise. After the FOMC statement, according to CME’s fed watch, there was a 78.8% chance of keeping rates in the 1.50%-1.75% range by march, a 7.5% chance of a quarter-point cut, a 13.6% chance of a quarter-point rise and a 0% chance of a half-point rise.
In a later speech, fed chairman colin Powell said the central bank plans to gradually slow the pace of its purchases, although it expects to continue providing repurchase support through April. It also noted that minimum repurchase bids would be raised at some point and that it was “somewhat surprising” that wages had not risen further when unemployment was so low.
Seventeen market professionals took part in the survey of Wall Street. Fourteen professionals, or 82%, expect gold prices to rise. Only three professionals, or 18 percent, expect gold prices to fall and none expect the market to move sideways.
Meanwhile, in an online poll of ordinary investors, 995 people voted. A total of 687 ordinary investors, or 69%, expect gold prices to rise next week. Another 163, or 16 percent, though gold prices would fall, with the remaining 145, or 15 percent, neutral.
Richard Baker, the editor of Eureka Miner’s Report, said Comex gold could hit $1,590 next week and break through the $1,600 level in the coming weeks.
“It’s all about the Wuhan coronavirus — gold went up, everything else went down,” Baker said. The declared global health emergency had a chilling effect on financial markets this week, with gold gaining against equities, key commodities, and major currencies.”
George Gero, managing director of RBC wealth management, predicted that gold was rising not only because of the virus outbreak but also because of Brexit and the US presidential impeachment, as well as economic news that could worry financial investors.
Jasper Lawler, head of research at London Capital Group, said: “I am happy with the state of the gold market and I think prices will continue to rise.”
Afshin Nabavi, head of trading at MKS, said Chinese market participants could return next week after the lunar New Year holiday.
“I want to buy on dips and expect prices to rise,” he says. He expects gold to trade in a range of $1,545 to $1,595. “Beyond $1,600, we should hit a high of $1,611 hit earlier in January, when Iran launched missiles.”