Spot gold held steady in Asian trading on Monday, briefly breaking above $1940, while silver extended gains above $27 as THE US market was closed on alert for unexpected news surprises.
A sharp decline in U.S. technology leaders last week sent stocks tumbling, increased risk aversion also favored the dollar and spot gold sold off on margin calls.
Leo Grohowski, chief investment officer at BNY Mellon Wealth Management in New York, said the sell-off last week was a warning sign for investors that August was a big month for the broader market. He believes there is still selling pressure on the technology leaders, leading to big swings in market conditions in the coming weeks.
Jpmorgan believes U.S. stock indexes will gradually recover from Thursday’s steep losses, but that the shadow of the U.S. presidential election could haunt the market for two months.
A Survey by Rasmussen Reports on September 4 found that With the gap narrowing, Trump’s approval rating has climbed back to its highest level since February, with 52 percent of Americans approving of the job the President is doing.
But a new CBS News poll shows Democratic presidential candidate Joe Biden holds a 10-point lead, and support for both parties is getting stronger as election Day approaches.
With the American election looming, markets fear an October surprise.
A recent Article in the New York Times reported that former Secretary of State Henry Kissinger telephoned former French Ambassador and foreign Secretary Francois Delattre in August. Kissinger is concerned about deteriorating relations and the risk of things spiraling out of control.
There’s always an “October Surprise” in The U.S. election in November. In the American political context, “October surprise” refers to a campaign’s timing of news releases that provide evidence that can change voters’ minds and influence opinion polls in order to favor the outcome of an election.
Mr. Drat said he has his own concerns here. The “October surprise” could include military incidents in the South China Sea, which Could be used by Mr Trump to demonstrate America’s resolve to confront China.
As for the outlook for gold, according to Kitco News’ Weekly Gold Survey released on Friday (September 4), sentiment in the gold market is starting to get a little confused as prices remain in a consolidation mode.
In the short term, retail investors remain remarkably bullish on gold; But the mood among Wall Street analysts has changed. After rising bullish sentiment the previous week, Wall Street analysts have taken the upper hand this week. But while short-term sentiment in the gold market has shifted, many analysts see the fall as a buying opportunity.
Commerzbank’s head of commodities research Eugen Weinberg said he had been neutral on gold recently. He added that while the dollar is a near-term threat, it won’t be enough for gold to break through its current support levels. “There’s a lot to digest in this market,” he said. “This period of consolidation is likely to last much longer without affecting the overall long-term trend.” Right now, I really don’t see anything that would push gold above $2,000. But I don’t see anything that would cause it to really go below $1,900.”
On a daily chart, the dollar index is trading in a narrow range around 92.90 after retreating from Friday’s high. The daily chart MACD red momentum column continues to expand, with the KDJ random index trying to break above the 50 level to indicate a strengthening of short-term bullish momentum, or further shock to the upside.
On the 4-hour chart, the DOLLAR index briefly neared resistance to its 200-day moving average on Friday, but quickly fell back to near its 100-day moving average. The MACD red momentum column is gradually weakening, with the KDJ stochastic trying to break below the 50 level below, indicating a slowdown in dollar bullish momentum and further short-term pressure.
On a daily chart, gold remains in its recent choppy pattern, trading around $1,935. Daily chart MACD green momentum column weakened slightly, KDJ random index continued to hover around the 50 level, indicating gold bearish momentum weakened, fear of further volatility.
The 4-hour chart shows gold trying to rally after hitting a low of $1916 to see if it could become a short-term low. The MACD green momentum column gradually weakened and nearly disappeared, and the KDJ random index tried to rebound from the oversold level to near the 50 level, indicating gold bearish momentum to slow, short term or further shocks to the upside.
On daily charts, silver broke a three-day losing streak on Friday and is now trading above $27. The daily MACD green momentum column was little changed, with the KDJ random index falling below the 50 level, indicating solid bearish momentum for silver and further price volatility.
In a 4-hour chart, silver’s downward trend from 28.90 appears to be slowing, with the focus now on whether the previous low of $26.29 can be held. MACD green momentum column weakened slightly nearly disappeared, KDJ random index continued to rebound above the 50 level, indicating silver bearish momentum weakened, short term or further shocks to the upside.
Fundamentals positive factors:
- British Prime Minister Boris Johnson will give the European Union an ultimatum on Monday, saying the two sides must reach a new free trade agreement by October 15 without further delay.
- In his speech on the China-India border situation, Trump said that the United States is willing to provide assistance for the border dispute between China and India. According to Reuters, Trump made the remarks at a White House press conference on September 4.
- On the evening of September 4, Chinese Defense Minister Wei Fenghe insisted that “not an inch of China’s territory should be lost” and Indian Defense Minister Manmohan Singh reiterated that China must return to the Line of Actual Control (LOC) during a meeting in Moscow, bringing the talks to a stalemate.
- New Delhi: India is prepared to continue to use its armed forces to ensure national security while scrutinizing China’s military reforms and activities to shape its future strategy, Chief of Defense Staff Bipin Rawat said on Thursday. It comes amid a worsening stand-off between Indian and Chinese forces along the disputed Himalayan border.
Fundamentals negative factors:
- On Friday, the U.S. Labor Department released its nonfarm payrolls report, which showed 1.71 million new jobs were created in August, against market expectations of 1.35 million. The jobless rate was 8.4 percent and the market was expecting 9.8 percent, a fourth straight month of improvement, boosting confidence in the U.S. economy
- U.S. Treasury Secretary Steven Mnuchin says the White House and Congress will reach an agreement to fund the federal government through early December, with details of the bill to be hammered out next week. The measure would keep U.S. government agencies open to avoid a government shutdown after existing funding ends Sept. 30. Mnuchin and House Speaker Nancy Pelosi have agreed to expand funding, according to a Democratic aide.
- The number of U.S. workers filing new claims for state unemployment benefits fell to 881,000 in the week ended August 29, from a previous reading of 1.06,000, the labor Department said on Thursday. It was the fifth straight weekly decline and the lowest since April 4.
- The Institute for Supply Management’s non-manufacturing index, released on Thursday, came in at 56.9 for April and August, down from 58.1 but still in an expanding range, similar to the same month for U.S. manufacturing.