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Original title: Epidemic escalation! The death toll in the United States exceeded 250,000 school closures in New York and the gold was “abandoned”? Can I still hold it?
FX168 Financial News (London) reported on Thursday (November 9) in the European market, spot gold rebounded slightly from the previous drop to around US $ 1,855 per ounce, and once returned above the US mark. $ 1,860. The downtrend caused by the news has not stopped. Investors are still taking in the positive news from the new crown vaccine, but with multiple risk factors in place, market sentiment has shifted from initial optimism to more cautious.
Indeed, risk aversion intensifies during the day, and the “period” of the deterioration of the new corona epidemic gradually overshadowed the news of the successful development of the vaccine. Wall Street experienced a wave of decline yesterday, with the Dow Jones index falling more than 1%. Today, European stock markets opened lower. The pan-European 600 index, which tracks the dynamics of European stock markets, fell 0.8% after the open, indicating that investors are nervous and uncomfortable during this trading session.
The deterioration of the new corona epidemic is led by the United States. Yesterday, Johns Hopkins University reported more than 250,000 deaths from the new crown. The cumulative number of confirmed cases exceeded 11 million. There are still more than 76,000 new hospitalized corona pneumonia patients. New York announced the temporary closure of schools and the infection rate has reached the highest level since the spring.
Stephen Innes, Axi’s chief global market strategist, said the decision to suspend classes in New York and turn it into distance learning once again shocked the market. “The moving average of the 7-day positive test rate in New York City reached a safety threshold of 3%, causing the school system to close. He has again raised concerns about the lockdown. “
Vaccine hope has clearly supported the market in the past two weeks, but Innes is concerned that the crisis will continue to escalate, especially during Thanksgiving. “Investors are increasingly concerned about the economic losses that have been caused and waiting for the launch of the vaccine. What is the consequence. Although the vaccine provided a bright light at the end of the tunnel, the tunnel became spongier and longer. I’m not a medical expert, but statistically speaking, the third wave of the US epidemic may get worse. “
Jim Reid of Deutsche Bank said: “Whether it’s the outlook or the market, it’s currently related to vaccines and viruses. Risk assets actually started to decline at the end of the US session. And closed at a low (the S&P 500 fell 1.16%). This is mainly due to the closing of schools in New York City after the new corona infection rate increased by more than 3%. In terms of changes in the industry, with the exception of auto industry stocks (up 1.14%), almost all industry groups in the US stock market. Energy stocks (-2.88%) and utilities ( -1.94%) “.
The epidemic situation in other countries of the world has also deteriorated. Japan has reported a record increase in the number of confirmed cases, including the peak of infection in Tokyo. India has reported about 9 million cases of infection.
In Europe, European Central Bank President Lagarde delivered a speech during the day to warn EU lawmakers that the second wave of the new corona epidemic is causing significant damage to the euro zone economy. “Overall, the euro zone economy is expected to be affected by a rapid increase in infection and the corresponding containment measures. The serious impact of this problem poses a significant downside risk to the short-term economic outlook. “
He called on EU leaders to quickly agree on a recovery fund. “The next generation of the EU Recovery Fund must be implemented immediately. The additional resources of the plan can promote expansionary fiscal policies, especially in those eurozone countries with limited fiscal space.”
Regarding the economic outlook for the Eurozone, he emphasized: “Until now, government support measures, especially short-term work plans, have protected families from unemployment and falling incomes. But this has not stopped Unemployment rate in some countries. Rising. In addition, as the consequences of the pandemic are threatening people’s employment and income prospects, consumers are expected to remain cautious in the current highly uncertain environment. “
Although the outlook is unclear, the recent trend for gold is clear. Since the launch of the Pfizer and BioNtech vaccine news, gold has remained under pressure. Gold futures posted their biggest one-day drop in 7 years. This week, Moderna’s vaccine news sent a clearer signal that the virus is highly likely to be contained next year.
Regarding the future trend of gold, the latest Forexlive article points out the following factors that need to be taken into account:
1. Consumer demand may pick up. China is the largest buyer of gold, these purchases are usually made during the Lunar New Year, soGold priceYou can collect from the end of December to January.
2. Global risks still exist: Brexit, the stagnation of the US government and the widespread impact of COVID-19 on the economy cannot be ignored.
3. A loose monetary policy will continue to exist. The Fed is expected to keep interest rates at the current ultra-low level by 2023.
4. Some ETF buyers have abandoned gold. The largest share of ETF-SPDR Gold fell 26 tonnes last week. This is the largest outflow of funds since 2016.
5. US 10-year Treasuries are rising, reducing the attractiveness of gold.
Regarding the intraday gold trend, the MarketPulse agency wrote an article in which an unexpected effect caused by the narrow fluctuations in gold prices in the last week is that the support level of the long-term trend line is it has risen to a position closer to the market. The intraday trend line is located at $ 1870.50. As momentum pauses, the risk of gold prices falling again increases, especially if the price of gold closes below $ 1,870.50 today. This will cause the price of gold to drop further to $ 1,850.00 and may extend the decline to the cut-off point of the 200-day moving average of $ 1,792.00. On the upside, gold is still facing stiff resistance at $ 1,900.00, with the closing prices of the 50- and 100-day moving averages at $ 1901.50 and $ 1908.90, respectively.
Swissquote Bank said it is still bearish below 1887.00, and the target is 1864.00 and 1855.00. Or, it is bullish above 1887.00, and the targets are 1885.00 and 1892.00 respectively.
At 6:46 p.m. Beijing time, spot gold was trading at $ 1,856.95 an ounce.
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