What will Trump do today? Beware of escalating US-China tensions. Gold prices just surged, breaking through $1940.

FX168 Finance News (Hong Kong) reported that with the stalemate in negotiations over a new round of US COVID-19 relief, the US dollar continues to fall under pressure, and spot gold has rebounded after a sharp drop, stabilizing after the previous shocking plunge. In Asian trading on Thursday (August 13), gold prices continued to rise, breaking through the $1940 mark, silver rose by 2%. For this trading day, the market is focusing on the US initial jobless claims data, which may provide the most timely indication of labor market performance. In addition, we need to remain vigilant for sudden news on the US-China situation. According to the latest news from the Times, the US has deployed stealth bombers to counter the Chinese threat.

The US's new stimulus plan remains stalled, with both sides 'miles apart'!

Investors are still waiting for news on negotiations for a new round of US economic stimulus. The stalemate between the two parties over the next federal aid bill entered its fifth day, with neither side ready to resume talks. The bill aims to help tens of millions of Americans suffering from the coronavirus pandemic.

Senate Republican leader Mitch McConnell said late Tuesday that economic stimulus talks had yielded no progress. He told reporters there had been no dialogue between the White House and Democrats. "Another day has passed, and we're at an impasse."

House Speaker Nancy Pelosi said she rejected Treasury Secretary Steven Mnuchin's "proposal" to restart negotiations on a new round of stimulus because the White House wanted to reduce the size of the stimulus and was unwilling to compromise on this issue.

Pelosi said the two sides were "miles apart" and there was a "gap."

In a joint statement with Senate Democratic leader Chuck Schumer on Wednesday, Pelosi said: "We have made it clear to the administration that if they are willing to add $1 trillion, we are willing to reduce $1 trillion. We are willing to resume negotiations when they start taking this process seriously."

Treasury Secretary Mnuchin had called Pelosi, but it seems to have had no effect. Mnuchin earlier said Congress could pass a stimulus plan of "a little over $1 trillion" first, and then discuss additional stimulus needed later. He said, "We can talk later this year or in January, we don't have to do everything at once."

Mnuchin did not announce any plans for further negotiations, only saying, "I can't guess" about the prospects for an agreement. "If the Democrats are willing to be reasonable, there will be a compromise," Mnuchin said. "If the Democrats want to focus on politics and don't want to do anything that's successful for the president, there won't be an agreement."

Karl Schamotta, chief market strategist at Cambridge Global Payments, said: "Of course, this (stalemate) puts pressure on the outlook for US growth. The market has had to lower its expectations for the size of the final stimulus package."

The political debate surrounding the US economic stimulus package has stalled the recent rally in the US dollar, US Dollar Index fell back after surging on Wednesday, and fell further under pressure during Thursday's trading, currently trading around 93.25.

Scotiabank's chief foreign exchange strategist Shaun Osborne also said: "The fundamental factors that have supported the dollar over the past two years are gradually fading, and investors will be chasing returns in other non-dollar markets in the coming months. The dollar will remain weak in the medium term, but it will not collapse. There is only a possibility of moderate correction in the short term."

Latest US-China news! The US deploys stealth bombers to counter the Chinese threat

According to the British media, The Times, the US has deployed stealth bombers to counter the Chinese threat.

Three US B-2 stealth bombers arrived at Diego Garcia in the Indian Ocean on the eve of a live-fire exercise by the Chinese navy north of Taiwan.

This is the first time since 2016 that the US has deployed nuclear-capable strategic bombers to this remote island, indicating growing concerns about China's intentions towards Taiwan.

The report said that the bombers flew across the Pacific from Whiteman Air Force Base in Missouri and landed at Diego Garcia, a British Indian Ocean Territory. With its advanced stealth technology, the B-2 can penetrate enemy territory without being detected by air defense radar.

According to Taiwanese media reports, on Monday morning (August 10), two Chinese aircraft briefly flew over the "median line" of the Taiwan Strait. Although these aircraft were expressing China's displeasure at US Health Secretary Alex Azar's visit to Taiwan, similar missions this year have resulted in at least 20 incursions into Taiwanese airspace and waters.

As US relations with Beijing deteriorate over issues such as human rights and trade, the Trump administration has emphasized its support for Taiwan.

This week, US Health Secretary Alex Azar became the highest-ranking US official to visit Taiwan in 40 years, a visit condemned by China and threatened with unspecified countermeasures.

Azar concluded his three-day visit on Wednesday, during which he met with Taiwanese leader Tsai Ing-wen. Azar said his talks with Taiwanese officials involved a "bilateral trade arrangement." Azar said: "The purpose of my visit is to highlight the deep partnership and friendship between Taiwan and the United States." He did not elaborate on the proposed trade arrangement.

Gold's plunge is still fresh in our minds. What's next?

After two days of sharp volatility, gold prices are now trying to gain a foothold. Gold prices rose slightly above $1940 in Asian trading on Thursday, up $30 from the daily low.

Gold prices plunged more than $110 on Tuesday, the biggest single-day drop since April 2013. Meanwhile, silver prices plunged 15% on Tuesday, the biggest drop since October 2008.

Phillip Streible, chief market strategist at Blue Line Futures, said: "This decline is a healthy correction, it brings more people into the market, so prices will rebound again, and we will see new highs by the end of the year, with gold possibly reaching $2,500 per ounce and silver reaching $35."

He said: "The fundamental factors supporting gold prices haven't changed. Federal Reserve Will maintain a dovish stance for a long time, they have said they will allow inflation to exceed their target.

Vivek Dhar, a commodities analyst at Commonwealth Bank of Australia, pointed out that he does not believe the decline in gold prices is a reversal of the trend. "The gold market is in an unprecedented environment, and this sharp correction shows that gold's volatility will continue."

Bart Melek, global strategy head at TD Securities, said, "Technically and fundamentally, it's not surprising that gold prices fell below $1890 and silver prices fell to around $22/oz, and then rebounded to set new highs. The best thing now is that investors have a second chance to enter the market, and gold and silver prices may hit new highs in the remainder of this year or next year. The correction is a second chance for investors to get on board."

Columnist David Fickling said that in fact, the rise in gold prices over the past year is a correction of the low levels of the past several years, and this correction should have come a long time ago. Fickling believes that just as the gold market has never fallen below $1000/oz since 2009, this time gold prices will not return below $1700/oz.

Joe Foster, portfolio manager of VanEck International Investors Gold Fund, said that this decline is just a correction in gold prices, and its long-term upward trend has not changed, and its target of $3400/oz gold price has not changed.