Trump’s latest claim: “seeking peace, not hostility”! Gold early pierced again 1550 fear more down space

International spot gold was trading at $1,550.20 an ounce in early Asian trading on Friday. After extending its slide to a low of $1,540.10 an ounce in the previous session, gold has rebounded slightly from that low. At this point in the session, gold showed signs of accelerating its decline, falling through the $1,550 barrier and hitting an intraday low of $1,549.40 an ounce.

“We seek peace, not hostility, and there will be a heavy price to pay if we threaten the safety of the American people,” US President Donald Trump said on Tuesday. The last administration led the world towards war, and we are now on the “path to peace”.

The dollar’s steady rise hit a high of 97.57 in the previous session before retreating from that point. Gold, meanwhile, traded in a tight range at lows after plunging to $1,540. Separately, all three major U.S. stock indexes rose and continued to record highs, with WTI crude falling to $58.66 a barrel.

Gold fell overall in the previous session as risk aversion eased on bets the U.S. and Iran would not seek further conflict.

Holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 1.05 percent on Wednesday, reflecting falling demand for the metal as a safe haven. U.S. stock indexes hit record highs as the conflict between the United States and Iran in the Middle East eased, while optimism about trade between the United States and China grew.

Rising risk appetite means safe assets such as gold have been hit by profit-taking and this is likely to continue for some time, said standard chartered analyst Suki Cooper.

Ilya Spivak, the senior currency strategist at Dailyfx, said, “as the U.S. and Iran seek to defuse the crisis, some of the market jitters have eased, sending gold sharply lower. There is no immediate sign of an escalation, although it is not yet possible to predict with any degree of accuracy whether it will not happen, as there are still risks.”

Hareesh V, head of commodities research at Geojit Financial Services, said: “after a steep rally in gold prices, we are now ina correction due to the easing situation in the US and Iran, in addition to the positive developments in the US dollar over the past two days that have also weighed on gold prices. If the us dollar moves higher, we will see further gold pullback.”

In addition, market analysts said that if global economic and trade conditions continue to improve, it will further depress safe-haven demand for gold. As a result, the rally since the end of last year is likely to face a reversal after a daily “cloud cover” technical pattern, followed by initial support at the 10-day moving average of $1542 an ounce.

The US house of representatives has approved a bill to limit Donald trump’s war powers

On the afternoon of January 9, the U.S. House of Representatives passed the war powers resolution with 224 votes in favor and 194 against, with 13 abstentions. The resolution, which would limit President trump’s authority to take military action against Iran, would then go to the senate.

The resolution was sponsored by representative Elissa Slotkin, a Michigan democrat. Slotkin is a former CIA intelligence analyst and an expert on Shiite militias. The bill would limit trump’s ability to make unilateral war decisions under the war powers act of 1973.

Although the passage of the bill somewhat allayed fears of a further escalation in the conflict, it still needs a vote in the republican-controlled senate and is in doubt.

In addition to the U.S. constitution, the war powers resolution is based on the war powers act of 1973. In 1973, congress passed the war powers act, under which the President must notify Congress within 48 hours of military action.

Democrats say the bill would be binding under the war powers act of 1973 if it is also approved by the senate.

Under the bill, the U.S. government’s military hostilities against Iran must end within 30 days unless approved by congress.

“Over the past eight months, the United States has deployed more than 15,000 additional troops to the Middle East in response to rising tensions with Iran,” the bill reads. The killing of Iranian general Omar Suleiman, as well as Iran’s ballistic missile attacks on Iraqi military bases, have the potential to sharply escalate hostilities between the United States and Iran.”

On January 3, a U.S. drone strike over Iraq’s Baghdad international airport killed the commander of Iran’s Quds force, the Islamic revolutionary guard corps. House Democrats, angered by Mr. Trump’s order to assassinate Mr. Suleiman without consulting congress, have called for an end to the escalation of hostilities against Iran.

House Speaker Nancy Pelosi (d., calif.) has said the killing of Mr. Suleiman won’t make Americans safer. The White House’s failure to consult Congress before military action, as is customary, was a mistake.

The U.S. Constitution says the President is the commander-in-chief of the armed forces, and Congress has the power to declare war. Historically, the battle between Congress and the White House over the right to war has been repeated. After the second world war, the war powers of the President of the United States continued to rise until the Vietnam war aroused widespread opposition in American society and congress finally passed the war powers act in 1973.

The war powers resolution passed the house of representatives and will now go to the senate. With Republicans holding a majority in the senate and generally supporting all Mr. Trump’s actions against Iran, the chances of the resolution passing the senate are virtually nil.

Last year, the U.S. senate and house of representatives also passed a war powers resolution to limit U.S. military support for the civil war in Yemen. Mr. Trump ultimately vetoed the resolution, and neither the house nor the senate had the two-thirds majority needed to override it.

House minority leader Kevin McCarthy, a Republican, said the bill had no limit on trump and was, therefore, a meaningless vote.

The house of representatives will vote on Thursday to limit Mr. Trump’s right to go to war with Iran, house speaker Nancy Pelosi warned on Wednesday. Ms. Pelosi said in a statement on Wednesday that Mr. Trump’s actions demonstrated a lack of a consistent strategy for ensuring the safety of the American people, completing a de-escalation with Iran, and ensuring stability in the region.

Pelosi said members of congress have serious and urgent concerns about the administration’s decision to take hostile action against Iran and the lack of a strategy to move forward. “In keeping with our responsibility to keep Americans safe, the house will consider a resolution on war powers to limit the President’s military action against Iran,” she wrote in the statement. The resolution will go before the house of representatives on January 9.”

Gold outlook

“I think gold will be at least $2,500 to $3,000 an ounce by 2025,” said Paul Schatz of Heritage Capital. I don’t think the gold rally is over. The gold market is hot right now. Everybody loves gold. Gold is often seen as a safe-haven asset, but investors have kept their money in gold despite the good performance of equities.

Shafali Sachdev, head of Asia-pacific currency advisory and enforcement at BNP Paribas, said investors should buy gold and sell the currencies of oil-dependent importers to protect their portfolios in the face of a conflict between Iran and the United States.

Goldman Sachs analysts also point out that gold is a better haven than crude oil. Historically, after the Middle East crisis, gold has generally experienced a relatively large rise. This is consistent with our research that gold is a better hedge against geopolitical risk in the long run.

Fxempire analyst AG Thorson notes that gold has entered a healthy medium-term correction due to geopolitical fears, after falling back from an explosive high of $1,613.

Societe Generale notes that gold started 2020 strong and seems to see 1450 as the new solid support for prices in 2020, while 1500 is more of base support, a preferred psychological line of defense.

At 09:00 Beijing time, spot gold was trading at $1,550.10 an ounce.

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