The situation between China and India is big news! There have been three gunshots fired by Chinese and Indian troops! Singh will make a statement on the border issues today! Gold just dipped below 1950! A buying opportunity on the dips?

On Thursday (17 September) in plate, the dollar index continues to rebound, now near 93.45, the federal reserve on Wednesday to maintain loose monetary policy stance, suggests that interest rates will be at least three years at a level close to zero, the fed raised GDP expected this year, however, that stimulate the stronger dollar. Meanwhile, spot gold has come under short-term pressure as the dollar has risen, with prices just below $1,950 an ounce and now trading around $1,947. Analysts noted that the Fed’s easing stance will remain supportive of gold prices in the afternoon, as well as issues such as coVID-19 and Brexit. Geopolitical tensions are also the driving force behind gold’s future rally. On the closely watched China-India situation, several foreign media reported that there have been three incidents of gunfire between Chinese and Indian troops since the end of last month. One of them happened just before the Foreign ministers’ meeting between China and India. Today, Indian Defense Minister Manmohan Singh will make a statement on the border issue, which investors need to pay attention to.

The Federal Reserve announced Wednesday that interest rates will remain near zero for several years until the U.S. economy recovers from the novel Coronavirus epidemic and the labor market returns to normal.

At the end of its two-day policy meeting on Wednesday, the Fed said short-term interest rates would remain at its target of 0% to 0.25%. Projections by Fed officials suggest that interest rates are likely to remain near zero until 2023. All but four members said they believed interest rates would remain at zero.

Moreover, the Fed now thinks US GDP will shrink by 3.7 per cent in 2020, better than the 6.5 per cent fall it forecast in June.

“As inflation continues to be below this long-term target, the Committee’s objective is to achieve inflation of just over 2 per cent over a period of time in order to achieve an average long-run inflation rate of 2 per cent and to maintain long-term inflation expectations at 2 per cent,” the Federal Open Market Committee said in a statement after the meeting. The Committee wishes to maintain an accommodative monetary policy stance until these outcomes are achieved.”

It added: “It is appropriate to maintain this target range until Labour market conditions are consistent with the committee’s assessment of maximum employment and inflation rises to 2 per cent and is expected to be modestly above 2 per cent for some time.”

Analysts noted that the fed’s statement was more dovish, with the notable change in the statement being that “the Committee seeks to achieve inflation of a moderate level above 2 per cent over a period of time”. The question, however, is how much “moderate” and how long “for a while”.

Analysts said the Fed’s statement was dovish but not more dovish than markets had expected. The Fed raised its full-year GDP forecast, a move that was positive for the dollar and hurt gold. However, the fall in gold prices is likely to be short-lived, with the fed’s overall easing stance, geopolitical tensions and brexit uncertainty all expected to drive a rebound in bullion prices in the afternoon, and some investors may be looking to buy bargains.

“People expect the Fed to keep interest rates low for a long time, with inflation above its 2 percent target,” said David Meger, head of metals trading at High Ridge Futures. “The weak economic data support the view that the Federal Reserve will remain accommodative and congress will deliver another stimulus, which are the main pillars supporting gold.”

Jeffrey Christian, managing partner at CPM Group, said gold prices would continue to rise due to political uncertainty in the United States, Brexit and weakness in the overall global economy.

Lukman Otunuga, senior research analyst at FXTM, said it would be difficult to bear gold as strong fundamentals would drive prices higher. He added that economic uncertainty, geopolitical instability and increased stock market risks surrounding the Novel Coronavirus pandemic will continue to support safe-haven demand for gold. He also noted that rising inflationary pressures are now another strong pillar of support.

James Steel, chief precious metals analyst at HSBC, said: “Real interest rates will remain negative. In the current low interest rate environment, holding non-yielding assets such as gold becomes more attractive.”

Michael Matousek, chief trader at U.S. Global Investors in New York, said, “It’s optimistic right now because Investors think low interest rates are here to stay for more than three years. That’s very good for gold.”

Analysts and traders are uniformly bullish on gold’s outlook for the week, according to the WEEKLY FX168 Financial Market Survey released on Saturday. Among traders and analysts surveyed weekly by financial markets, 80 per cent were bullish on gold and 20 per cent were consolidation.

Three gunshots have been fired in China and India in the past 20 days

New Delhi: Indian and Chinese border troops exchanged fire last week just days before their foreign ministers met, further undermining decades of restraint on the two countries’ borders, Indian officials said on Wednesday, Reuters reported on Wednesday.

The two sides have long agreed not to use firearms on the Line of Actual Control or on the informal border, and no shots have been fired in 45 years.

But officials familiar with the situation told Reuters that three warning shots had been fired in the western Himalayas since late last month. There, Chinese and Indian troops face off over territorial disputes, often in close proximity. “In all of these incidents, shots are fired into the air, thankfully, not at each other,” one of the officials said.

One of the incidents occurred on the north bank of the hotly contested Lake, when Indian Foreign Minister Sushil Jaishankar and His Chinese counterpart, Wang Yi, met in Moscow last Thursday.

The shooting was not disclosed by either side, and another official said it was the deadliest of the shootings. The official said he could not provide further details, but the Indian Express newspaper said 100-200 rounds had been fired.

Separately, the Times of India reported on Wednesday that the two armies had not fired a single bullet along the Line of Actual Control (LAC) for 45 years. But in the past 20 days, the two armies have exchanged fire at least three times in eastern Ladakh because of an ongoing territorial dispute.

A military source said: “the first incident occurred on 29 August solstice 31 when the Indian army pre-empted an attempt by China to occupy the high ground on the south bank of the lake. The second incident took place on 7 September near the Mukhpari Heights.” In a third incident on September 8 near the northern bank of Lake Banguong, more than 100 bullets were fired by troops from both sides because of aggressive Chinese behaviour, military sources said.

At the time of the incident on September 8, Indian Foreign Minister Sushil Jaishankar was in Moscow for a meeting of the Shanghai Cooperation Organization, where he met with Chinese Foreign Minister Wang Yi to discuss the border issue.

The Times of India reported that according to the discussion, the two sides were supposed to hold a military-to-military meeting, but the exact date and time has not been confirmed by China.

Indian Defence Minister Rajenath Singh is expected to make a statement on the China-India border issue today, ANI reported Thursday.

India has made it clear to China that it will protect its “sovereignty and territorial integrity” at any cost, Singh told parliament on the afternoon of September 15 local time.

“We want peace, but we are prepared for all possible scenarios,” Mr Singh said at the time. We should be confident that our armed forces will manage the situation successfully.”

During their meeting last week, Chinese and Indian foreign ministers agreed on a five-point plan to resolve the long-running confrontation in eastern Ladakh, including abiding by all existing border management agreements and protocols, maintaining peace and tranquility, and avoiding any actions that could escalate the situation.

India and China have held several rounds of talks at the military and diplomatic levels since April and May, but have yet to achieve any significant results.

The Times of India reported that the Indian army has now stepped up its preparedness in Ladakh region in case of any incursion by Chinese forces there.

China is believed to have increased its troop deployment along the Lac in Ladakh over the past week, bringing the total number of Chinese troops deployed to about 52,000, the Economic Times reported on Wednesday. Among them, the PLA has deployed 10,000 soldiers on the south bank of the lake since August 29 solstice 30.

Indian Prime Minister Narendra Modi delivered a tough message on the China-India border dispute in a traditional speech before a parliamentary session, Indian media NDTV reported Monday. “We hope that the parliament and all its members will unite and send the message that the country stands with our soldiers,” Modi said.

Despite the recent five-point agreement between India and China to ease border tensions, China kicked the ball into India’s court on Wednesday, saying India must correct its “mistakes”, disengage and take concrete steps to ease tensions.

A Chinese foreign Ministry spokesman said On Wednesday that China was not responsible for the recent border incident with India. The Indian side violated the agreement and important consensus between the two sides. First, it illegally crossed the border and provoked, unilaterally changed the status quo in the border areas and posed a threat to the security of China’s border forces.

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