Just now, market sentiment suddenly deteriorated! In addition to the US dollar, global market sell-offs intensified, gold plummeted, and Asian stocks fell across the board.
International spot gold is in the $1761/oz area. The price of gold continued its volatile downward trend during the day, and recently experienced a sudden acceleration in decline, with an intraday low of $1754.08/oz. Gold's bull market continues to refresh its high since October 2012. With the extremely loose global monetary policy and increasingly tense international relations, the foundation of gold's bull market is solid, and it is expected to continue to hit new highs. In the short term, a cooling of risk appetite will give gold a boost. As long as risky assets such as US stocks do not experience a collapse similar to that in March, triggering liquidity shortages, the demand for safe haven assets will provide new support for gold.
Time:
2020-06-25 17:00
On Thursday, June 25, during Asian market hours, international spot gold was trading around $1761 per ounce. The price continued its downward trend, with a sudden acceleration downwards, briefly touching a low of $1754.08 per ounce.
Market sentiment shifts dramatically; overnight gold prices reverse course!
The previous trading day saw gold prices surge, nearing $1780 per ounce, but then risk aversion suddenly increased sharply. European and US stock markets experienced massive sell-offs, with the three major US indices recording their largest daily declines this month. Among them, the Dow Jones Industrial Average fell over 800 points at one point, and the German DAX index also closed down 3.59%.
New developments in the China-India conflict! Risk aversion is strong in the market.
The global pandemic continues to spread, and the resurgence of the epidemic in Beijing is not yet fully under control. However, geopolitical storms continue to rage. In addition to US-China relations, US-North Korea relations, and US-Korea relations, the tension caused by the recent China-India conflict is still brewing, and the latest news on the situation has emerged.
Regarding the global pandemic, Worldometers' real-time statistics show that as of 00:00, June 25, Beijing time, the cumulative number of confirmed cases of COVID-19 worldwide has exceeded 9.51 million, and the cumulative number of deaths has exceeded 483,000. The United States has the highest number of confirmed cases globally, exceeding 2.46 million, with over 124,000 deaths.
We need to continue to monitor the domestic and international epidemic situation. Signs of easing or positive vaccine news may boost market optimism, potentially impacting safe-haven assets like gold and silver.
Gold's future outlook
Bank of America said in a research report on Wednesday, June 24, that the gold market appears to be on the verge of breaking through a major resistance point, and its price movement is in line with Bank of America's expectation that gold will reach a record high before the third quarter of 2020.
ANZ analyst Daniel Hynes pointed out that concerns about a second wave of the global pandemic, especially in the United States and Latin America, continue to lead investors to question the sustainability of the economic recovery, thereby supporting gold prices.
Myrmikan Capital founder Dan Oliver said on Wednesday, June 24, " The Federal Reserve 's balance sheet faces devaluation risks. If there are problems with the underlying assets, gold will respond. Due to the COVID-19 pandemic, the Fed has been buying frantically, so the equilibrium price of gold has also risen accordingly. Therefore, the numbers to balance the balance sheet are now very high. Therefore, the current forecast for gold prices has changed, and it is now expected to rise to $10,000 per ounce."
Metals Focus's 'Gold Focus 2020' report points out that following the implementation of large-scale economic stimulus and monetary easing policies globally to combat the COVID-19 pandemic, gold may challenge its historical high before the end of 2020, driven by investment buying. It believes that gold prices still have significant upside potential at current levels, and expects prices to approach the 2011 peak of $1921 per ounce, but it is unlikely to surpass this level this year.
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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.