Gold price surpasses $1725; Powell's speech looms; Trump holds weekend rallies; stay alert for new developments in the US-China situation
During the Asian market hours, the US dollar index edged lower, currently trading near 97.45, while spot gold showed an upward trend, currently above $1725 per ounce. Several Federal Reserve officials will be speaking on this trading day, with investors focusing on the remarks of Fed Chair Powell. Investors hope to gain more clues about future policy from the speeches of Powell and other Fed officials. US President Trump will hold a campaign rally this weekend, and investors will be watching to see if he makes any comments related to US-China relations; any negative remarks could increase risk aversion in the market early next week, thereby stimulating gold prices.
Time:
2020-06-19 15:46
On Friday, June 19, during Asian trading hours, the US dollar index fell slightly, trading near 97.45, while spot gold rose, currently above $1725 per ounce. Several Federal Reserve officials will be speaking on this trading day, with investors focusing on the remarks of Federal Reserve Chairman Powell. Investors hope to gain more clues about future policy from the speeches of Powell and other Fed officials. This weekend, US President Trump will hold a campaign rally, and investors will be watching to see if Trump makes any comments on US-China relations; any negative remarks could increase risk aversion in the market early next week, thus stimulating gold prices.
Gold prices broke through $1725, and there may still be room for further increases.
For some time, analysts from several banks have predicted that gold prices will rise in the long term due to the global large-scale loose monetary policy and stimulus measures.
The US dollar strengthened on Thursday as concerns over rising coronavirus cases supported demand for safe-haven currencies, with the US dollar index hitting an intraday high of 97.59.
In recent weeks, the US dollar has strengthened as investors worry that the COVID-19 epidemic will affect economic growth. Safe-haven assets rose, while risky assets fell. Worldometers real-time statistics show that the cumulative number of confirmed COVID-19 cases worldwide has exceeded 8.56 million. The United States has the highest number of confirmed COVID-19 cases globally, exceeding 2.26 million, with more than 120,000 cumulative deaths.
Powell Returns
At 1:00 AM Beijing time on Saturday, Federal Reserve Chairman Powell and Cleveland Fed President Mester will participate in a video conference titled "Building a Resilient Workforce".
Powell has already appeared twice this week. On Tuesday, the first day of a two-day congressional hearing, Federal Reserve Chairman Powell said that the timing and strength of the US economic recovery are highly uncertain.
In testimony prepared for the Senate Finance Committee on Tuesday, Powell said, "The economy is unlikely to fully recover unless the public is confident that the epidemic is under control." He noted that the US economic recovery from the coronavirus crisis will be uncertain, uneven, and lengthy.
Powell said, "The longer the economic downturn lasts, the greater the long-term damage from permanent job losses and business closures."
Powell said on Tuesday that there are no shortcuts to economic recovery, and he reiterated that the Fed will use all its tools to help the economy recover.
At noon local time on Wednesday, Federal Reserve Chairman Powell appeared before the House Financial Services Committee for a hearing, receiving remote video questioning from members of Congress for the second day in a row. In line with market expectations, Powell continued to use this occasion to emphasize the importance of fiscal policy and provided an outlook on subsequent operations of the Fed's bond-buying program.
In addition to Powell and Mester, Boston Fed President Rosengren will speak on the economic outlook at 10:15 PM Beijing time on Friday. At 00:00 AM Beijing time on Saturday, Federal Reserve Governor Quarles will speak.
Trump Restarts Campaign Activities; Beware of New News on the US-China Situation
Despite the rapid rise in US coronavirus infections, US President Trump's campaign rally in Tulsa, Oklahoma on June 20 will proceed as scheduled.
Investors will focus on Trump's remarks at this rally. Trump may discuss several topics, including the economy, trade, the epidemic, recent US protests, and the international situation. Investors need to pay close attention to whether Trump will make any comments on US-China relations; any negative remarks could increase risk aversion in the market early next week, thus pushing up gold prices.
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Although gold prices rose this week, market volatility has clearly increased. While the US-UK agreement is symbolic, its content is limited and insufficient to alleviate concerns about a global economic slowdown. Therefore, gold prices will continue to fluctuate between safe havens and policy signals, closely monitoring the Federal Reserve's interest rate expectations and global trade sentiment.