International spot gold on Monday (September 14) began to counterattack, intraday peak hit $1962.20 / ounce, since August 7, the adjustment of gold prices has entered the fifth week, after repeated up and down, the overall volatility is still limited. Super Central bank week could break gold’s current doldrums. But positive vaccine news, including Astrazeneca’s announcement that it would resume vaccine trials and Pfizer’s announcement that it might release final-phase trial data by the end of October, helped boost risk sentiment and may temporarily limit gold’s upside.
News of Britain’s exit from the European Union continues to rattle market nerves. British Prime Minister Boris Johnson has faced opposition from several former prime ministers over his new internal market legislation, which is seen as breaching some of the terms of his previous exit agreement with the European Union. Geoffrey Cox, the former UK justice secretary, said today: “Ultimately, breaches of international law cause long-term and permanent damage to the reputation of nations. For me, it is also a matter of honour. We signed it. We know what to sign. We simply cannot seek to eliminate the consequences of doing so.”
It is now being debated in the British Parliament and a vote will follow. Failure to pass both the house of Representatives and the House of Lords would mitigate the risks, while uncertainty would soar. Sterling will come under more pressure and risk aversion will increase.
Meanwhile, US President Donald Trump’s previous ban on TikTok, which is owned by Chinese company Bytedance, expires tomorrow. Bytedance and Oracle have reached a preliminary “technology partner” agreement on TikTok’s U.S. operations, which will not include a sale of the TikTok operations, the day’s sources said. The US Treasury Secretary Steven Mnuchin said TikTok, which has a September 20 deadline for a deal, had received proposals for an agreement and would be reviewed this week.
On the china-us situation, the LATEST statement from the US Embassy in Beijing confirmed that THE US Ambassador to China, Branstad, will leave Beijing in early October as the US special Envoy.
On Saturday, Mr. Trump hinted that Ms. Branstad might join the race. In a video posted on Twitter by Senator Joni Ernst of Iowa, Mr. Trump said that Ms. Branstad would be returning home. Branstad is stepping down, though his successor has not been confirmed. The two countries are currently at odds over a number of issues, from China’s new security law in Hong Kong to the novel Coronavirus pandemic and territorial issues in the South China Sea.
Even if Mr Trump is re-elected on November 3, the gap could persist for months. The Senate is scheduled to meet only about two more weeks before election day. Mr Branstad played an important role in the so-called first phase of the trade agreement with China, and the Chinese foreign ministry has in the past described him as an “old friend of the Chinese people”. But last week, after the People’s Daily refused to publish an article by Mr. Branstad, public opinion attacks on both sides intensified.
Technically, gold’s position at the end of a convergent triangle seems to be more significant for shorter-term investors, as a move to the end of a convergent triangle often means that a range-fixing session is coming to an end and a new trend is imminent.
This week the Federal Reserve and other global central Banks will announce their latest interest-rate decisions; Economic indicators such as U.S. retail sales will be released. In response to the Fed’s decision, analysts said Fed Chairman Colin Powell announced a move from a 2 percent inflation target to an average inflation target, but made no mention of further easing signals such as yield curve control and focused on the labor market. That could mean the Fed will maintain its easing bias for a long time to come, but without a major change in the economic outlook, easing such as negative interest rates will remain out of the spotlight.
TD Securities said it expected the Fed to return to its ultra-loose monetary policy stance. “This week’s Fed rate decision will clear the second hurdle for gold bulls, with fed officials expected to give a more dovish signal.”
Over time, this means longer average maturities for bond purchases, further supporting the precious metals market, the bank said. “In this case, gold will break through to the upside.”
Economists at Nomura reckon that while they do not expect the Fed to announce any major monetary policy this week, the meeting will be important as the Fed releases its latest economic forecasts, including for 2023. “We believe that key long-term issues will be discussed at the September meeting, but major policy innovations will have to wait until later this year to be announced,” the economists said.