The news from China, India, and the United States is never-ending! What a crowd of Fed officials! Can gold bulls embrace a turnaround?

Spot gold remained broadly in range in early Asian trading on Wednesday, edging up $2 to near $1,902. Spot gold closed at $1,898.81 an ounce, down $13.42, or 0.70 percent, after touching as low as $1,894.52 an ounce and as high as $1,919.61 as investors closely watched fed officials’ comments on the state of the economy.

On Tuesday, Federal Reserve Chairman Colin Powell and Treasury Secretary Steven Mnuchin appeared together in the House of Representatives for a regular congressional hearing on the fiscal stimulus bill passed in March. Overall, the two men’s statements were in line with market expectations, with their upbeat tone on the recovery and emphasis on the importance of further fiscal stimulus.

Mnuchin said that while half of the jobs lost to the outbreak have yet to be recovered, he still expects the U.S. economy to recover faster than at any time since the previous crisis. In his testimony, Powell also noted a significant rebound in economic data, but emphasized that expectations for a rebound are based on strong financial support, that labor markets and economic activity remain significantly weaker than before the outbreak, and that the path of the rebound is highly uncertain and highly dependent on outbreak control and “government at all levels.”

However, with several key items in the $2.2 trillion relief bill expiring in March, the gap between the two parties and the election make it less likely that another big stimulus package will be enacted soon. At the hearing, Mr. Mnuchin said he believed a targeted stimulus bill was still needed and that the White House was working to come up with a bipartisan stimulus plan.

Asked what would happen if there was no further stimulus, Mr Powell said bluntly that he did not know what would happen, but there were risks, such as us consumers subsisting on the benefits they had saved over the past few months.

On the subject of congressional concern about the slow progress of the Main Street lending program, Mr. Mnuchin said there were limits to the funding for the Fed’s tools (which cannot be expanded to corporations at will), but he said he would seek legislation to redirect some of the money to “more useful channels.”

Next, four Fed officials will give important speeches. There were big moves in the DOLLAR index and gold as the Fed officials spoke yesterday, with the DOLLAR index breaking 94 at one point and investors wary of the risks.

The geopolitical situation continues to be the focus of risk sentiment.

Indian media printed newspaper (The Print) reported Tuesday that The security and strategic research center issued a titled “military action illustrates China’s intentions in The Indian border, The report showed that hole lang (Doklam) crisis since 2017, China in ShiKongXian (LAC) air force base near, air defense positions and helicopter field has more than doubled, shows that its intention to in The future to strengthen military posture in The border dispute with India.

In addition to the recent stand-off between the two countries in eastern Ladakh, Beijing’s military actions have led to long-standing regional tensions with India. The report said China’s strengthening of military infrastructure along the Indian border represented a shift in Beijing’s approach to territorial disputes. In particular, the past two years have seen a “dramatic increase” in the upgrading of Chinese military facilities, which led to the deadly clash in the Galewan Valley on June 15.

On the CHINA-U.S. front, LAWMAKERS in the U.S. House of Representatives on Tuesday overwhelmingly passed a bill that would effectively ban IMPORTS of U.S. products from China’s Xinjiang Uygur Autonomous region because of alleged use of government-backed forced labor. The new law, passed on Tuesday, means that importers cannot purchase all or part of the products produced in Xinjiang unless the US government can show “clear and convincing” evidence that they were not produced with forced Labour. Lawmakers voted 406 to 3 in favor of the bill, called the Uygur Forced Labour Prevention Act.

On Monday, Republicans on the House Foreign Affairs Committee released their final report on China’s actions related to the spread of COVID-19, accusing China of covering up the virus threat and accusing the World Health Organisation of failing to counter it. The 96-page report, based on republican midterm findings released in June, goes a long way to supporting President Trump’s view that the novel Coronavirus pandemic could have been avoided had it not been for China’s move.

U.S. President Donald Trump told the United Nations General Assembly that China must be held accountable for its action on the novel Coronavirus outbreak. In a recording broadcast at the UN conference, Mr Trump accused China of allowing the coronavirus to “leave China and infect the whole world”. “The UN must hold China accountable for their actions,” he said.

Aftermarket Outlook:

  1. Chintan Karnani, chief market analyst at Insignia Consultants, said he attributed Monday’s decline to a “quarter-end portfolio reallocation”. “Some bond investors who have moved into gold and equities have started to reinvest a little in bonds,” he said on Tuesday. They expect bond yields to rise in the last quarter of the year. Hopes for a vaccine have also supported bond yields.” Karnani said once the testimony is over, gold traders will be building positions for U.S. September non-farm payrolls data due on October 2. “The poor non-farm payrolls data and the big drop in jobs in September. Would easily lead to gold prices above $2,000 “, a record high. “Other positive factors have not changed — pre-election risk, protectionism, helicopter money — but for gold to rise quickly, U.S. jobs would have to be very bad in September,” Karnani said.

Michael Moor, founder of, said gold’s plunge below $1,933 has opened the door to another nearly $200 drop in the market. “I’m bullish on gold, but you can’t ignore a possible bear market correction in this bull market,” he says. “In the sell-off that we’ve seen, gold has broken through some major levels and doesn’t seem to be holding its ground at all.” Moor said gold had entered a 15-month bull market after breaking out of a range of nearly three years. He added that gold’s rise to an all-time high last month was a significant move, so a pullback was not surprising. Although the $1,900 level has proven sticky, the market tends to move lower as long as gold remains below the key pivot area of $1933-1944, he said. A break below last month’s low of about $1,874 would test key support levels between $1,714 and $1,696, he added.

George Gero, managing director of Royal Bank of Canada Wealth Management, said the heavy selling in the gold market was not surprising because of a combination of factors. He noted that the threat of a second wave of blockades was dragging down economic growth, which in turn was dragging down the stock market. Now, however, Gero added, concerns are more serious because investors are holding out little hope for new stimulus measures to protect the economy. He added that if no new stimulus measures were announced, gold prices would continue to struggle.

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