On Tuesday (June 2) in Asian trading, the dollar index held steady around 97.80, while spot gold suddenly and quickly rose back above the $1,740 / ounce mark, after falling as low as about $1,736 / ounce earlier. Rising friction between the United States and China, as well as protests against racism in the United States, supported gold prices on Monday, which rose nearly $10. U.S. President Donald trump, speaking in the rose garden of the White House on June 1, said U.S. troops would be deployed if states failed to address the problems of unrest and looting. In terms of the global epidemic, the total number of confirmed covid-19 cases worldwide has exceeded 6.36 million, and the total number of confirmed cases in the United States has reached nearly 1.86 million.
On Monday, the dollar fell to its lowest level since mid-march, driving gold higher for the day. The dollar index.dxy closed down 0.51 percent at 97.81, after hitting an intraday low of 97.79.
Spot gold rose as high as $1,744.30 an ounce on Monday, and fell as low as $1,722.69 to $1,739.36, up $9.85, or 0.57 percent.
However, gold was curtailed by optimism about a potential novel coronavirus vaccine and the easing of a lockdown, which supported global stocks near three-month highs.
Eli lilly & co. (nyse: lly) announced that it has begun a phase I study of a novel coronavirus potential antibody treatment for the first group of patients. The trial began earlier than rival Regeneron, which is also developing a potential antibody therapy. Lilly said it expects the results of the phase 1 study to be released by the end of June.
Gilead sciences announced the results of a phase 3 clinical trial of redesivir in patients with moderate covid-19. These studies were conducted on a 5-day and 10-day regimen. The study showed that patients in the five-day treatment group were 65 percent more likely to have improved clinical symptoms by day 11 than those in the standard treatment group.
Haresh Menghani, an analyst at FX Street, a leading financial website, said the strong rebound in gold prices was tempered by optimism about the possible availability of a vaccine and the gradual liberalization of the global economic blockade, including expectations of a v-shaped rebound in the global economy.
Analysts also said that the recent significant rise in gold prices, some investors chose to take profits, which is one of the factors that gold prices failed to rise further. On a technical level, gold is expected to face strong resistance at $1,745 an ounce.
Spot gold fell as low as about $1,736 an ounce earlier in Asia on Tuesday, but the precious metal has just briefly risen about $5 to stand at $1,740 an ounce again.
As long as gold stays above $1,719.00 an ounce, bullish expectations will remain in effect, with the first target at $1,764.00 an ounce, according to an article on the leading financial website Economies.com. If gold were to break above $1,764.00 an ounce, the next target would be $1810.00.
John LaForge, head of physical asset strategy at Wells Fargo, says the gold market has much further to go.
LaForge said gold has done well this year as it has held above key support levels of $1,700 and has seen double-digit gains this year. He added that gold would continue to do well as central Banks pursued never-ending quantitative easing and low interest rates.
There were explosions as Mr. Trump said he would call in federal troops to police the country
On the afternoon of June 1, local time, trump delivered a speech in the White House rose garden, denouncing the violence and vandalism during the demonstrations, and again asked the state governors to call on the local national guard to maintain security. Mr Trump said he would use federal resources, including “thousands” of armed forces, to end ACTS of violence and destruction.
Speaking at the White House, President trump said states were strongly advised to mobilize the national guard to stop the violence or face military intervention under the insurgency act.
“I mobilized all federal and local resources, civil and military, to protect the rights of law-abiding americans,” Mr Trump said in a hastily arranged speech at the White House.
“Today, I strongly recommend that every governor deploy the national guard in sufficient Numbers to control the streets,” trump said. Mayors and governors must build overwhelming influence until the violence is quelled. If a city or a state refuses to take the necessary action to protect the lives and property of its residents, then I will deploy the United States military and deal with their problems quickly.”
It’s worth noting that the sound of distant explosions could be heard on live video just as Mr. Trump began his speech threatening to deploy troops.
“Trump is talking and we can hear explosions in the street,” said Jim acosta, an American journalist who was at the White House.
Three U.S. defense officials said earlier that the United States is deploying between 200 and 250 active-duty troops to Washington, d.c., and they could arrive as early as the evening of June 1, local time. CNN also photographed military vehicles near the White House.
Since last week, protests have lit dozens of cities across the country over the violent death of 46-year-old George Floyd, who was black, by police in Minneapolis.
Lawyers for the family of George Floyd on Monday called for first-degree murder charges against Derek Chauvin, a Minneapolis police officer. An independent autopsy found that Freud died of “asphyxiating death due to pressure on the neck and back, resulting in a loss of blood flow to the brain and asphyxiation,” lawyers said.
In a conference call with the governors on Monday, Mr. Trump accused them of not adopting tougher tactics to quell the protests.
Mr. Trump pressed the governors to deploy more national guard troops, called for 10 years in prison for violent protesters and blamed the governors themselves for the race riots in the state. Mr Trump also told the governors that he would hold the country’s most senior military officers “accountable”.
Tensions between China and the us could push gold higher still
On Monday, the latest news on trade between China and the us was one of the drivers of the day’s rally.
China has asked state-owned companies to stop buying soybeans and pork from the us, CNBC reported, citing two people familiar with the matter. U.S. President Donald trump said at a news conference on Friday that Hong Kong no longer has enough autonomy to enjoy the special treatment granted by the United States, and that his administration will begin the process of removing the policy exemptions that give Hong Kong special treatment.
On the afternoon of May 28, the third session of the 13th National People’s Congress adopted by a large vote the decision of the National People’s Congress on establishing and improving the legal system and enforcement mechanism for the maintenance of national security in the Hong Kong special administrative region.
Heavy government purchases of U.S. corn and cotton have also been halted, one of the sources said. If the U.S. government takes further action, China could extend the directive to more U.S. agricultural products, these people said.
After trump’s comments on Friday, Chinese importers have canceled imports of 10,000 to 20,000 tons of U.S. pork, roughly equivalent to a week’s worth of orders in recent months, the source said. Another source familiar with the administration’s plans said the worst-case scenario is that if trump continues to target China, China will have to abandon the first phase of the trade deal.
“There is growing concern that the first phase of the u.s.-china trade agreement will be torn up,” said Edward Moya, senior market analyst at brokerage firm OANDA. He added that widespread protests in the United States have raised concerns about another wave of coronavirus cases.
Analysts say tensions between China and the us are a hotbed of geopolitics and could push gold higher in the near future.
Edward Moya, senior market analyst at broker OANDA, said: “the market is only focusing on the two largest economies at the moment and this could be a protracted battle. “You’re going to continue to see safe-haven demand for gold because tensions between the U.S. and China are going to be very high.”
Phil Flynn, senior market analyst at the Price Futures Group, expects gold to rise. “Rising tensions between the U.S. and China and continued economic stimulus around the world should give gold upward momentum,” Flynn said.
Sean Lusk, co-head of commercial hedging at Walsh Trading, also sees gold prices rising as tensions rise between the United States and China. “If things continue to get worse, that will only help gold in the long run,” Lusk said.