Gold investment: has the environment changed? Dollar falls, gold oil counterattack! But still, need to be careful of gold technical short encircling!

International spot gold was at $1709.2 an ounce in Asian trading on Wednesday. Gold fell to $1,702.80 an ounce in early trading before recovering from there and accelerating to a high of $1,712.20 an ounce, up 0.09 percent on the day.

The intraday dollar index retreated from the start of the day, accelerating to a low of 99.65, now down 0.29 percent. Meanwhile, international oil prices continued to rebound, hitting an intraday high of $14.36 a barrel, up 14.67 percent on the day after earlier rising more than 15 percent. Brent crude also maintained its rally, rising 3.74 percent on the day after earlier rising more than 4 percent.

As the global outbreak began to ease and economies in the United States and Europe began to reopen, sentiment appeared to ease from a gloomy environment, and the panic selling that had preceded it seemed to be over. Day in addition to the dollar, the financial market main assets comprehensive counterattack. Meanwhile, gold also got a boost from news of a sudden explosion in a Middle East oil tank, which led to increased buying of crude oil.

A car bomb exploded in the turkish-controlled Afrin region of northern Syria on Monday afternoon, killing and wounding dozens of people, local media reported. The Syrian state news agency said the attack took place in a market in the city of Afrin when an explosive device was placed in an oil tanker truck and detonated, killing and wounding many people. Oil prices rose after Afrin reported a “tank” explosion.

International spot gold opened at $1,712.41 an ounce, rose as high as $1,715.30 and dipped as low as $1,691.19 to close at $1,706.98, down $7.21, or 0.42 percent. Spot gold briefly fell more than $20 to just above $1,690 an ounce in U.S. trading.

COMEX June gold futures ended down 0.7 percent at $1,723.80 an ounce.

Ole Hansen, analyst at Saxo Bank, said: “gold has lost some of its bright spots as the view that easing the blockade will lead to a v-shaped recovery and demand for gold as a diversification and hedge has diminished. Weak physical demand now offsets all the positive hype about gold, so there is a risk of a correction for some time and even further weakness. Overall, however, the reasons for the current level of gold prices will not disappear when the blockade is lifted.”

“It is hard to overstate the demand destruction caused by a novel coronavirus,” said Avtar Sandu, senior commodity manager at Phillip Futures, in a note. “volatility in financial markets remains high and precious metals, especially gold, remain a good hedge for investors against other financial portfolios.”

Gold’s strong rally so far this year, with the World Bank forecasting an average of just $1,600 an ounce, could run out of steam. In an April commodities report, world bank market analysts said they expected gold prices to rise nearly 15% this year from last year’s average of $1,392.

Technical analysis:

The dollar

On the daily chart, the dollar index continued to fall under pressure, MACD green momentum column unchanged, the KDJ random index further significantly lower, indicating the dollar to strengthen downward momentum, followed by further retracement.

On the 4-hour chart, the dollar index maintained a volatile decline, MACD green momentum column held steady, KDJ random index turned lower, indicating the dollar short term downward momentum also held steady, the next expected to continue to extend the decline.


On the daily chart, gold prices from the high down, MACD green momentum column looming, KDJ random index slightly lower, indicating gold downward momentum to restart, and then may still fall again.

On the 4 hour chart, gold prices to maintain a narrow finishing trading, MACD green kinetic energy column unchanged, KDJ random index went up, indicating gold short term momentum mixed, the next expected to continue to maintain a narrow consolidation.

fundamentals Positive factors :

  1. According to statistics from real-time information and data update website world meters, as of 07:04 Beijing time on April 29, more than 3.13 million cases had been confirmed globally, with more than 217,000 deaths. Among them, more than 1.03 million cases had been confirmed in the United States, and nearly 60,000 deaths had been recorded, more than the number of people killed in the Vietnam war.
  2. A car bomb exploded in the Turkish-controlled Afrin region of northern Syria on Tuesday afternoon, killing and wounding dozens of people. The Syrian state news agency said the attack took place in a market in the city of Afrin when an explosive device was placed in an oil tanker truck and detonated, killing and wounding many people.
  3. Dr. Anthony Fauci, director of the national institute of allergy and infectious diseases, said the United States could have a “bad fall” if no effective treatment for the coronavirus is found by then.
  1. The international rescue committee (IRC) estimates that unless rapid action is taken to contain the spread of a novel coronavirus, there could be as many as 1 billion infections in crisis-affected countries. At worst, this could lead to as many as 3.2 million deaths.
  2. The conference board said on Tuesday that its consumer confidence index fell sharply to 86.9, the lowest level since 2014, from 120 in March. The data was weaker than expected because economists had widely expected the index to be around 88. U.S. consumer confidence has fallen sharply since mid-march as the country has imposed a blockade to try to stop the spread of a novel coronavirus.

Fundamental negative factors:

  1. As the global epidemic eases and governments from Italy to New Zealand announce they are easing restrictions, businesses in more parts of the United States will reopen.

2, 19 outbreak in 27 COVID – press conference, New York state governor cuomo said that at present the state COVID – 19 hospitalized patients maintain a number of stable level, but haven’t reached the ideal level of the began to decline, and on the death toll, last weekend two days, the state of New York COVID – 19 one-day new death cases of 367 cases and 337 cases respectively, the decline in Numbers, but still huge total. Cuomo said Sunday that the state plans to reopen the economy in stages.

  1. News of the health abnormality of the supreme leader of the DPRK, Kim jong-un, has been closely watched by the outside world. South Korean President moon jung-joon responded on April 26 that Kim jong UN is alive and well. He said Mr. Kim had been in wonsan in gangwon province since April 13 and that no suspicious movements had been detected.

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