Physical gold continued to hover above $1930, having previously fallen below that level, while silver came under pressure around $26.50 in intraday limited Asian trading on Monday.
Gold has had a roller-coaster week, falling for a second straight week, as weak positions, delayed stimulus deals and a rebound in the dollar and real interest rates have pushed the price of the precious metal down.
“Barring further profit-taking, we believe the longer-term upward trend [for gold] remains intact, given our expectations of further dollar weakness and the scale of stimulus, and that interest rates will remain low or negative,” said Standard Chartered’s Cooper.
On the US bail-out bill: The White House and Democrats remain deadlocked in negotiations over a new bail-out.
Democratic and Republican leaders continued to blame each other on Sunday for failing to agree on a new bailout plan. The move came a day after the House of Representatives approved a bill to provide $25 billion in new funding for the U.S. Postal Service, but Republicans invalidated it.
The Democratic-led House of Representatives approved the bill Saturday in a special session convened by House Speaker Nancy Pelosi to prevent postal service funding cuts and planned service cuts from interfering with mailing ballots for the November 3 election.
But the vote failed to change the impasse over the next phase of epidemic aid since August 6, when negotiations between the White House and Democratic congressional leaders broke down over funding levels and unemployment benefits. Senate Majority Leader Mitch McConnell said the Republican-controlled Senate “will never pass” the postal bill.
Sino-us situation: US President Donald Trump raised the possibility of decoupling the US economy from China’s in an interview with Fox News that aired on Sunday.
“The second question you asked was — ‘Are you going to decouple from China and not do business with China? ‘Because you know we don’t have to…” The host asked, “What’s the answer?” “If they don’t treat us right, I will, I will do that,” Mr Trump replied.
“Our interview with Steve Hiltonx on Fox News will air at 9pm on Sunday. Tune in!” Trump tweeted in advance of the interview.
On top of that, China and the United States are also doing more military things.
China’s People’s Liberation Army (PLA) has released information about several major military exercises in recent days. According to the announcement of the maritime administrations in Qingdao, dalian, tangshan and guangdong, the people’s liberation army (PLA) will organize a series of live-fire military exercises in the south, yellow and south seas from August 22 to August 29.
Bohai sea: according to the tangshan maritime safety administration, live fire was carried out in the bohai sea on August 24 and September 30, and military training was conducted in relevant sea areas, and entry was prohibited.
Yellow Sea: According to the website of the Lianyungang Maritime Safety Administration, military exercises have been conducted in the yellow Sea area from Lianyungang to Qingdao from 12 o ‘clock on August 22 to 12 o ‘clock on August 26. No entry.
South China Sea: The People’s Liberation Army (PLA) will hold a military training exercise in the southeastern waters of Hainan Island from 0:00 on August 24 to 24:00 on August 29, according to the Hainan Maritime Safety Administration. No entry; According to the Guangdong Maritime Safety Administration, the PEOPLE’s Liberation Army (PLA) will conduct military training in relevant waters of the South China Sea from 00:00 on August 24 to 24:00 on August 29, and passing ships will pass outside the waters.
East China Sea: A naval aviation brigade under the Eastern THEATER Command has begun round-the-clock training, a weibo post said. On the same day, the People’s Liberation Army daily reported on its microblog that, over an area of the East China Sea, naval aviation units under the Eastern Theater Command conducted intensive round-the-clock training.
In fact, the PLA has organized at least nine major military activities, including exercises, in the past month, according to information News, including a report on the ban issued by the Maritime safety Administration in Shandong and Guangdong provinces.
The US Army has sent a modified commercial aircraft to spy on China as the Chinese navy prepares to conduct simultaneous exercises in multiple waters. According to the official microblog of China Central Television (CCTV) on August 23, the US Army sent a plane to China for three consecutive days on August 21. The plane was flying in the direction of Taiwan before suddenly veering off the coast of Zhejiang province.
Based on the Challenger, a business jet operated by Bombardier Inc. of Canada, the aircraft is the first U.S. Army spy jet. The aircraft is equipped with a super-high resolution detection and surveillance system. It is not painted by the US army, but it is employed by the US army to carry out military reconnaissance under the name of civilian.
As for the gold outlook, Internet Wealth Builder’s Gordon Pape has been skeptical of the metal until now, but for the first time in the wake of the outbreak, he said some gold should be held. Gold is expected to rise about 10 percent from its current level, Pape noted.
MKS PAMP Group said the near-term direction of the gold market will still depend on the dollar. Gold’s downside support was around 1925, followed by psychological support at $1,900 an ounce. “The key upside resistance is in the 1975 to 1980 $/ oz area.”
On the daily chart, the DOLLAR index.DXY was slightly firmed after Friday’s gains and was trading around 93.20. The daily chart MACD red kinetic energy column expands slightly with the KDJ random index trying to break above the 50 level, indicating that further rebound is likely to follow.
On the 4-hour chart, the DOLLAR.DXY continues to rally from 92.12 and has risen above all its moving averages. Watch for a firm 100-date average of 93.10. The MACD red momentum column weakened slightly, while the KDJ random index held steady above the 50 level, indicating a slowdown in bullish U.S. dollar momentum, short term or further consolidation.
On daily charts, bulls were hit by the previous two big negative lines, with gold now trading below its 20-day moving average. The daily chart MACD green momentum column is gradually expanding, with the KDJ random index trading around 50, indicating gold bearish momentum remains and a consolidation may follow.
On the 4-hour chart, gold appears to be heading for a falling high, with an eye on whether the previous low of $1,911 will be broken. MACD green momentum column gradually weakened, KDJ random index hovering around the 50 level, indicating gold bearish momentum weakened, short term or further consolidation.
On daily charts, silver is hovering near its 20-day moving average as it tries to regain ground following its August 11 collapse. A small expansion in the green momentum column on the daily MACD chart, with the KDJ random index hovering above the 50 level, indicates that bearish momentum is strengthening in silver or further consolidation.
On the 4-hour chart, silver continued its slide from $28.46 and is now losing almost all of its moving average, with an eye on the 100-session average at 26.58. The MACD green momentum column was largely stable, with the KDJ random index falling below the 50 level, indicating that bearish momentum is still in place for silver and may decline further in the short term.
Fundamentals positive factors:
- The situation between China and the US remains tense. In an interview with Fox News, Mr Trump suggested that if China did not treat the US properly, it might decouple the US economy from China’s.
- China’s People’s Liberation Army (PLA) has released information about several major military exercises in recent days. According to the announcement of the maritime administrations in Qingdao, dalian, tangshan and guangdong, the people’s liberation army (PLA) will organize a series of live-fire military exercises in the south, yellow and south seas from August 22 to August 29.
3. The Labor Department said 1.106,000 people filed new claims for unemployment benefits last week, unexpectedly returning to the 1 million marks against market expectations of 920,000, indicating the recovery in jobs remains slow.
4. The European Union and the United States have said that they will not recognize the election results of August 9 in Belarus and continue to put pressure on the Belarusian President.
Fundamentals negative factors:
- Us business activity rebounded sharply in August to its highest level since early 2019, data showed on Friday, with a rebound in new orders in both manufacturing and services.
- The leaders of The US Democrats and Republicans continued to exchange barbs on Sunday, taking responsibility for failing to agree on a new rescue plan.
- Big news on vaccines. China’s national health committee said Zheng Zhongwei, director of the science and technology development center, China has officially launched on July 22 new vaccine emergency use, new crown vaccine Ⅲ phase of a clinical trial into the group of more than 20000 people.
- White House Economic Adviser Scott Kudlow expects the U.S. economy to grow 20 percent or more in the third and fourth quarters.