As the DOLLAR index continued to come under pressure in Asian trading on Tuesday, spot gold accelerated its short-term rise above $1,885 an ounce, peaking at $1,887.06 an ounce. Gold jumped nearly $20 on Monday, helped by a weaker dollar. New Delhi: India has deployed three types of missiles to counter the Chinese threat and is said to be capable of hitting all air targets such as fighter jets, cruise missiles and ballistic missiles, according to Indian media reports. Beyond the geopolitical situation, investors are also focused on Tuesday’s first debate in the US presidential election.
Gold prices rose sharply on Monday as the dollar retreated from a two-month high. Spot gold closed at $1,880.21 an ounce, up $19.18, or 1.03 percent, after peaking at $1,882.80 an ounce.
The dollar index.DXY closed at 94.28 on Monday, down 0.32 percent after touching 94.15 as low as intraday. The dollar index.DXY rose 1.69 percent last week, its biggest weekly percentage gain since early April.
Gold surged on Monday, breaking through a key barrier of $1,877.00 an ounce and trying to stay above that level, according to Economies.com, a leading financial website, suggesting further gains are on the way. With gold closing above $1,877.00 / oz on the day, the yellow metal is expected to move up to another bullish target of $1,901.00 / oz.
If gold falls back below $1,860.90 an ounce, that will put bearish pressure back on gold, with a short-term target of $1,794.85 an ounce, Economies.com added.
“Gold has found a new key technical support level of $1,850,” said Edward Moya, senior market analyst at OANDA in New York. You could see gold investors starting to feel more optimistic about adding to their gold holdings. Gold has fallen hundreds of dollars from its all-time high, and investors see this as a buying opportunity.”
Investors should not expect the rise in volatility in the gold market to end soon as sentiment has not shifted significantly in recent days, according to a Weekly Kitco News gold survey released on Friday.
“There is so much uncertainty and volatility that the market will be chaotic for a while,” said Afshin Nabavi, head of trading at MKS. He added that he was not only neutral on gold but also on the sidelines, waiting for a clearer trend to emerge.
Among Wall Street analysts, opinions on the price of gold this week are almost even, with the bullish camp leading by a narrow margin. Of the 16 participants, six analysts (38 per cent) expect gold to rise; Three analysts (31 percent) each expect losses or a sideways move this week.
For many analysts, the dollar will be the key factor in determining whether gold prices will rebound or fall.
Ole Hansen, head of commodity strategy at Saxo Bank, said he is also keeping a close eye on the dollar. “It looks like the dollar has more momentum, so gold’s weakness may not be over yet,” Hansen said. But Hansen said gold’s correction was likely to be limited as increased uncertainty ahead of the U.S. election could spark safe-haven buying.
Peter Hug, head of global trading at Kitco Metals, said he would monitor the stock market closely to determine the direction of gold prices. He added that rising market turmoil and fears of a second wave of the pandemic were forcing investors to withdraw from gold and equities to cash out of the safe havens.
Richard Baker, editor of the Eureka Mining report, said he expected concerns about the spread of the coronavirus to continue to support gold prices.
Capital Economics assistant commodity economist Samuel Burman said in a report that they now expect gold to reach $2,000 an ounce by the end of this year and $2,100 by the end of 2021. The new year-end target is higher than the previous estimate of $1,900 an ounce. “We believe gold prices will continue to move higher as real yields fall slightly through 2021, which could put pressure on the value of the US dollar.”
The first debate of the US presidential election has begun
The first televised presidential debate in the United States will take place on Tuesday and is bound to cause market volatility. The debate could affect the dollar, which in turn could affect gold’s performance.
The first debate of the 2020 us presidential election will take place in Cleveland, Ohio, on September 29 at 9pm EST. President Donald Trump, the Republican nominee, and Joe Biden, the Democratic nominee, will face off in the first presidential debate.
In the first presidential debate, Mr Trump and Mr Biden will lay out further details of their policies and attack each other head-on. Given history, the first presidential debate is expected to draw a lot of attention from voters, especially the swing voters, who account for nearly one in five.
According to CNN, the first presidential debate will focus on six themes, including the past of Trump and Biden, novel Coronavirus pandemic, Supreme Court Appointment, racial discrimination, the economy and honest elections.
Foreign exchange strategists at ING said the post-debate poll would be closely watched.
“The highlight of the coming week will undoubtedly be the first presidential televised debate on Tuesday night in Cleveland,” ing strategists said. Polls show Mr. Biden with a 7 percent lead, and he will face a tough test from President Trump, who usually performs strongly at such events. One view is that trump’s strong performance is good for stocks and bad for the dollar.”
Suki Cooper, an analyst at Standard Chartered, said: “Gold has started to recoup its losses as the dollar weakens and real interest rates edge lower. There are a number of risky events this week, from the first of three US presidential debates to unemployment and inflation data, that will give gold a clue.”
According to the latest election results, Trump’s approval rating has been rising for nearly two months, but he still lags behind Biden. It will be interesting to see whether Mr Trump can close the gap further after the debate.
The Washington Post reported on September 27 that Trump had done little to prepare for the first debate, did not conduct mock debates or have a plan, and relied on his experience in office to “attack” his rival, Joe Biden.
Last week, several Indian media outlets quoted an unnamed senior Indian government source as saying that India had made it clear to China that its soldiers would open fire in self-defence. China’s strategy of outnumbering India — as it did in the Galawan Valley clash on June 15 — will not be tolerated. China has deployed about 50,000 troops and equipment along the border, including missile systems, tanks, and artillery, the source added.
Last Monday, China and India held their sixth round of military-ministerial talks on the Chinese side of the Line of Actual Control (LAC) border. Lt. Gen. Harinder Singh, commander of India’s 14th Army, met with Maj. Gen. Liu Lin, commander of the Southern Xinjiang Military Region, for the first time since August 2.
New Delhi: India has demanded that China “specifically and thoroughly” withdraw its troops from “friction points” such as Banguong Lake, Chushur and Gogra-Hot Springs, and finalised a road map for de-escalation across the eastern Ladakh border, the Times of India reported last Tuesday. The people’s Liberation Army (PLA) has been told “to take the first step” as it invaded Indian territory in several locations in early May, resulting in a stand-off and military build-up between the two sides, sources said.
Chinese Defense Ministry spokesman Wu Qian said on September 21 that the sixth round of military-level talks between the Chinese and Indian militaries was held at the meeting station of the Moldo border talks. Both sides around the region stability control sino-indian border ShiKongXian frank and in-depth exchange of views agree to earnestly implement the important consensus reached by the leaders of the two countries, strengthen the communication field, avoid misunderstanding misjudgment, stop to send more British troops to a line, not only changes in situ, avoid taking any action that could complicate the situation. The two sides also agreed to hold the seventh round of military-to-military talks as soon as possible, take practical measures to properly handle local issues and jointly safeguard peace and tranquility in the border areas.