Gold has rebounded from its lows while keeping its recent trading range unchanged, currently fluctuating below $1730. The number of initial jobless claims in the United States last week and the final annualized quarterly rate of real GDP in the United States in the fourth quarter were both stronger than expected, prompting the dollar to continue to rise, while US bonds strengthened and continued to suppress gold gains. But the epidemic in Europe is still severe, coupled with Federal Reserve Chairman Colin Powell's announcement that he will withdraw stimulus measures, gold risk-driven is difficult to support, the rebound is still strong but weak.
As of 08:29 Hong Kong time before the press deadline, the price of gold rose 0.06% to $1727.70.
Fundamental Analysis: us optimistic data strong Dollar Index continues to rise (bearish)
The number of initial claims for unemployment benefits in the United States recorded 684000 in the week to March 20, the lowest since March 14, 2020, the Labor Department said. The number of initial jobless claims fell unexpectedly sharply last week, according to the US CNBC, amid signs that recruitment activity in the US economy has increased, falling below 700000 for the first time since the novel coronavirus epidemic began a year ago. In the United States, real GDP grew at an annualized quarterly rate of 4.3% in the fourth quarter, with an expected growth of 4.1%, and the previous value grew by 4.1%.
As the US data showed optimism, the dollar was led by support, hitting a four-month high of $92.86. Against a backdrop of stable Treasury yields, gold prices hit their lowest level since March 18. But so far, the risk catalyst is still in the driving seat, the trend of the Fed and novel coronavirus epidemic can not be ignored by investors.
Fundamental analysis: Powell releases hawkish message of recovery and threatens to withdraw stimulus measures (bullish)
Federal Reserve Chairman Colin Powell hinted that one day he would begin to withdraw the stimulus measures that boosted the market during the epidemic. "as we make substantial further progress towards our goals, we will gradually reduce the number of Treasuries and mortgage-backed securities we buy," he said. Over time, we will be very gradually, with a high degree of transparency, when the economy recovers almost completely, we will withdraw the support we provided in times of emergency. "
The US Treasury has also called for a "stricter minimum tax" on US companies' overseas profits to eliminate incentives for companies to move profits outside the US. Sanders, chairman of the Senate budget committee, has proposed a 35% corporate tax, up from the 28% considered by US President Joe Biden, while Biden is considering a 21% tax on overseas income of US companies, with a formal plan expected in the coming weeks.
Powell's latest signs of withdrawal of stimulus measures, in turn, added to market concerns and continued to support gold's recovery rally. Coupled with the current European epidemic can not be alleviated, the number of confirmed cases and vaccine supply shortage plight, gold is still in the risk-driven link.
Fundamental Analysis: geopolitical War prolongs Trade Xinjiang Cotton incident chatters endlessly (Lido)
Swedish clothing brand Himm Group said in a statement on its website that it does not cooperate with any clothing manufacturing plant in Xinjiang, nor does it purchase products or raw materials from the region. 'Xinjiang is the largest cotton growing area in China, and so far, our suppliers have purchased cotton from farms in the region related to the (BCI) better Cotton Program, 'the statement said. BCI has decided to suspend the issuance of BCI cotton licenses in Xinjiang as credible due diligence in the region becomes increasingly difficult. This means that the cotton we need for our products will no longer be obtained from there.
Chinese sports brand Anta Sports said in a statement that it has taken note of the recent statement issued by BCI and is seriously concerned about this matter, and we are starting the relevant procedures to withdraw from the organization. Anta has been purchasing and using cotton from China's cotton producing areas, including Xinjiang cotton, and will continue to purchase and use Chinese cotton in the future, the statement said.
In response to the Hattorm incident, China's Ministry of Commerce responded that it hoped that relevant enterprises would respect the laws of the market, correct erroneous practices and avoid politicizing business issues. Gao Gao, a spokesman for China's Ministry of Commerce, said that the so-called "forced labor" in China's Xinjiang region is completely non-existent, and the flawless cotton in Xinjiang should not be tarnished by any force. It opposes any external forces interfering in Xinjiang affairs and China's internal affairs, and opposes the imposition of sanctions on relevant Chinese entities and individuals on the basis of lies and false information and on the grounds of the so-called human rights issue in Xinjiang.
Technical analysis:
Gold remains technically bearish, after hitting a low of about $1670 in the second week of March, followed by sideways consolidation and a slight decline. That means the 200-day moving average is the current highest, at $1859.70. The 100-day moving average is just under $1827.20, while the short-term 50-day moving average is currently fixed at $1785.20. Gold has major resistance at $1768.80 and strong support at $1680 to $1700.
