International spot gold traded at $1,710 an ounce in Asia on Thursday morning. After falling as low as $1,693.66 an ounce in the previous session, gold bounced back to close at $1,709.16 an ounce on the negative side for the third straight day. This session so far, the gold price shows the momentum of the shock rebound, once rose close to the $1,715 mark.
In the previous session, international spot gold sub-market opened at 1710.45 usd/oz in the morning, and rose as high as 1715.39 usd/oz. It fell as low as 1693.22 usd/oz. It closed at 1708.88 usd/oz, down 1.48 usd or 0.09%.
Meanwhile, COMEX gold for August delivery ended down 0.08 percent at $1,726.80 an ounce.
Edward Moya, senior market analyst at Oanda, said the eu’s new fiscal stimulus package “could be the beginning of a new stimulus package that should help support risky assets.”
The European commission on Wednesday unveiled a 750 billion euro ($826.5 billion) recovery fund as the region faces its worst economic crisis since the 1930s.
In addition to the European Union, the Japanese government also announced on Wednesday that it will pass a second supplementary budget for 2020, which will allow the Abe administration to spend more than 234 trillion yen on fighting the epidemic and promoting economic recovery.
Commerzbank analyst Eugen Weinberg said it was important to keep gold above $1,700. Otherwise, if the correction continues, speculators could leave the boat, adding to downward pressure on gold prices.
Although gold extended its losses in the previous session, it initially rebounded after hitting the day’s lows. Gold rallied strongly from its lows on Wednesday after U.S. secretary of state Mike Pompeo’s announcement that Hong Kong should no longer be considered an autonomous region raised tensions between China and the U.S. and led to renewed risk aversion.
In a late-night statement, Mr. Pompeo declared that Hong Kong no longer had a high degree of autonomy and would no longer be subject to the legal treatment given to it by the United States before July 1997. The announcement could pave the way for the trump administration to remove special treatment for Hong Kong’s economy. So far, Hong Kong’s economy has been unaffected by tariffs on Chinese imports.
Hu xijin, editor of the global times, commented: “whether Hong Kong is in a high degree of autonomy or not can not be defined by the United States!”
“Hong Kong is China’s Hong Kong, and its affairs are purely China’s internal affairs,” zhao lijian, a Chinese foreign ministry spokesman, said on Wednesday. If the us side is determined to harm China’s interests, China will take all necessary measures to resolutely respond and counter.”
Under the U.S. -hong kong policy act of 1992, the United States has a different attitude toward Hong Kong in trade, commerce and other areas than mainland China. It is estimated that $38bn of trade between Hong Kong and the us, where nearly 300 us companies have regional headquarters, could be affected.
Ms. Meng’s extradition case, which failed to secure her release, will continue
On Wednesday (May 27) morning, local time, Canada’s vancouver, BC province high court announced meng wanzhou extradition case results of the first sentence that huawei company vice chairman, chief financial officer meng wanzhou accord with standard of “double crime”, so will continue to trial for her extradition case, meng wanzhou will stay in Canada for later related hearing, and wait for the new trial results. Ms. Meng appeared in court that day to hear the verdict.
According to FX168 reporter at the scene of news, on May 27, local time Wednesday morning at 11 28, 2 PM (Beijing Time), shocked the world of “meng wanzhou extradition case” BC Supreme Court trial in Canada, huawei’s chief financial officer meng wanzhou constitute a “double crime”, the hearing will enter the second stage, the two sides will future meng wanzhou in vancouver airport was whether the defendant violated the constitution. As a plaintiff, Ms. Meng has the right to appeal to Canada’s highest court, and Canada’s attorney general has the final say on whether to extradite her.
“We are disappointed by the decision of the high court of British Columbia,” huawei said in a statement after Ms. Meng’s verdict was announced. We have always believed that Ms. Meng is innocent, and we will continue to support her in her quest for justice and freedom. We hope the Canadian justice system will eventually clear Ms. Meng. Ms meng’s legal team will work tirelessly to ensure that justice is done.”
Ms meng has been charged in the us with bank and wire fraud for allegedly misleading HSBC about huawei’s relationship with a subsidiary doing business in Iran. U.S. authorities later alleged that the bank handled financial transactions that violated U.S. sanctions.
Ms. Meng and huawei have denied the allegations.
Her lawyers argued that because Canada had not imposed sanctions on Iran, the bank was not at risk, had not committed fraud and would therefore not have committed a crime in Canada.
But justice Holmes disagreed with them.
Next, we need to keep an eye on the development of meng wanzhou’s case, as new unexpected news may trigger a sudden change in market sentiment, which may make major assets more volatile.
Golden aftermarket outlook
In a report, citigroup said the risk of a temporary pullback to the mid-to-lower end of the $1,600 level appeared to be rising in the short term, adding that it remained “fully bullish on gold’s performance in the medium term, with prices expected to breach $2,000 over the next 12 months”.
A research note from bank of America asset management said gold remained in a bullish trend as the outlook for an economic recovery took time and fed officials were likely to keep policy loose. Gold prices were little volatile last week, but analysts at bank of America reiterated their view that gold remains in a bullish trend. “The fed’s money printing could lead to future inflation, which should support gold prices,” they said.
FXTM research analyst Lukman Otunuga wrote that gold prices fell to their lowest level in two weeks on Wednesday as optimism about the reopening of the economy outweighed concerns about rising tensions between China and the United States. An improvement in market sentiment would certainly support risk appetite, hitting safe-haven assets. Gold has lost more than 1.5% of its value since the start of the week. With stocks rising and economic optimism running high, investor buying of gold could worsen in the short term. However, with trade tensions and global growth concerns still dominating the market, the current mood of risk-taking is unlikely to last. Precious metals are expected to rise as caution returns in the future.
Jim Wyckoff, the senior market analyst at Kitco in New York, wrote that gold bulls have an overall short-term technical advantage, but the daily trend is now in danger and they need to show new strength as soon as possible. The bulls’ next upside target is for June gold to close above the solid resistance level of $1,750.00. The shorts’ next short-term downside target is to push gold prices below solid technical support at $1,66.20.