₹1,700!Gold Price Plunged after Lasting Influence of US Non Farm Payrolls
The U.S.Labor Department released its July jobs report last Friday that the U.S Non-form payrolls is revised up to 943,000 from expected 850,000,the largest gain from August last year.The robust US jobs data raised bets over the Federal Reserve tapering stimulus earlier than expected,which weighed down the gold price to a plunge of 1,700$ mark and WTI a breakdown of 67$.The expectation of an upward shift in the central interest rate wreaks havoc on ultra-loose financial environment,which adversely affects gold assets featured by interest-free.
Fundamental Analysis
Let’s scan major International News First
1. Yellen Sets Out Rough Timeline for Congress on Global Tax Deal
U.S. Treasury Secretary Janet Yellen began to put a timeline on when the Biden administration hopes Congress can take up two key portions of a global tax agreement by Group of 20 finance ministers in Venice.
Speaking to the press on Sunday,Yellen declined, however, to signal whether she believes part of the plan will require a two-thirds vote in the Senate, an impossible hurdle unless Republicans come round to supporting the deal.
Yellen reiterated that she hoped Congress would approve the portion of the deal that would impose a global minimum tax rate on corporations of at least 15%.
2. G20 warns of fragility of global economic recovery and rising risk of Covid-19 variants
An upsurge in new coronavirus variants and poor access to vaccines in developing countries threaten the global economic recovery, finance ministers of the world’s 20 largest economies warned on Saturday.
A final communique said the global economic outlook had improved since G20 talks in April thanks to the rollout of vaccines and economic support packages, but acknowledged its fragility in the face of variants like the fast-spreading Delta.
“The recovery is characterised by great divergences across and within countries and remains exposed to downside risks, in particular the spread of new variants of the COVID-19 virus and different paces of vaccination,” it read.
3. Virgin Galactic founder Richard Branson successfully rockets to outer space
British billionaire Richard Branson on Sunday soared more than 50 miles above the New Mexico desert aboard his Virgin Galactic rocket plane and safely returned in the vehicle’s first fully crewed test flight to space, a symbolic milestone for a venture he started 17 years ago.
Virgin plans two more test flights, but company officials hope to begin launching paying customers, at $250,000 or more per seat, in early 2022.
The flight effectively upstaged Amazon founder Jeff Bezos, who plans a sub-orbital spaceflight of his own aboard Blue Origin’s New Shepard spacecraft on July 20 as the two companies compete for passengers in the emerging commercial space marketplace.
4. BlackRock CEO calls for stronger climate finance plan at G20 meet
BlackRock (BLK.N) Chief Executive Larry Fink on Sunday called for governments to develop a stronger long-term climate finance plan to unlock the private capital needed to fund the transition to a low-carbon economy.
Fink highlighted three “critical” issues needed to power the ecological transition:
Firstly, he said private companies needed to be under the same pressure to share information on their sustainability efforts as public companies.
Secondly, Fink said governments risked fuelling inequality unless they created more demand for greener products and services, lowering the cost, or ‘green premium’, that penalises the worse off and could fuel social instability.
Lastly, global institutions such as the World Bank and the IMF needed to be changed so they could do more to encourage private sector capital to help fund the transition in emerging markets.
5. Former U.S. Treasury Secretary Lawrence Summers said the market may underrate inflation risks
Summers said technical factors were probably at play in the recent surge in bond markets and warned that markets may be underestimating the risk of inflation.
U. S. Treasury yields fell sharply last week as investors came to the view that world economic growth may have peaked and a pick-up in inflation could prove transitory.
Summers told Reuters in an interview that the recent moves may be driven by “a variety of technical factors,” including “a running down of Treasury accounts and an unwinding of speculative positions”
Speaking on the sidelines of a meeting of finance ministers and central bank chiefs from the Group of 20 rich countries in Venice, Summers said markets do not have a great record in predicting future price rises.
“At times when inflation has significantly accelerated in the past, such as in the 1960s, markets have lagged rather than anticipated developments,”he said.
Summers has been vocal in warning about inflation risks, writing on his website in May that “the primary risk to the U.S. economy is overheating and not excessive slack ”.
6. Economic optimism reaches its peak, the Fed needs more signals to signal QE reduction
Economists including Andrew Husby、Eliza Winger and Niraj Shah wrote in their article that people’s optimism on economic recovery reached its apex,meaning economic forecasters have outlined a serious of potential paths for U.S. economic activity in 2021 and many people are paying heeds to its upward room.
Economists believe that widespread supply shortages mean redistribution of spending over time rather than the loss of basic economic momentum.Rising price is a symptom of these bottlenecks.Sensitive categories of economic rebound and energy price will result in higher CPI to be released on Tuesday than market expectations.
Economic growth remains robust in Q2 with the survey released on July 9 showing that API is expected to reach 9.0% ,lower than 10.0% in June.
They believed that one million some employment posts need to be added if the marker hopes to achieve the further progress of the economy in order that the Fed signals coming QE reduction.
Technical Analysis
Golds
The gold price seen on the sky chart broke the range as we expected with the opening price plunging into near 1680.In general,gold stays in the declining trend from high points and its outlook may rebound to the point surrounding tendency line or continue to drop after suppressed by the resistance near 1769.Selling limit is recommended as the main operation.Investors selling short near 1760 can stop loss at 1765 while those selling short near 1800 is advised to stop loss at 1810 with the target point of 1680.
Crude Oil
The crude oil as a whole runs in upward trend,which,however,shows reverse signals in recent days.Investors can observe whether it can stay stable above 68.It may keep rising if the price stays stable above 68 while it may start a new round of change or drop to near 62 if resisted by 68 point.Investors are advised to sell short near 68 and stop loss at 70 with the target of 65,62 and short-term extreme target at 57.
USDX
The U.S dollar index now stays in congestion triangle area and has been seen slight rise after the robust US non farm payrolls data last week ,which,however, fails to change the general downtrend of U.S dollars and fails to make USDX break above 93.It is suggested to keep the USDX in the outlook bearish.As for operation,investors can sell short near 93 with the target looking to 90.
S&P 500
S&P 500 is now in a complete uptrend channel with overall tendency upward.If there is no emergency,it may continue to climb and reach new highs.Investors can make slight buy and keep it bearish above 45,00.
BTC
Bitcoin price continues to rise in the sky chart and has been stayed stable above 41,000.In general,the previous slump has ended with limited resistance ahead near 47000.In terms of operation ,it is advised to keep it as bearish and make long buying when the price corrects back around 42,000.The point of 47,000 is expected.If BTC breaks above 47,000 in the further progress,investors can keep attention on near 51,000.
*Above is merely personal opinion for reference only
Author Profile:
Doctor Page,guest commentator of Fish.Pro,creator of Time-Space Psychological Trading Method,has 8-year rich experience in investment with unique trading knowledge and strategies. Focusing on dynamic changes of global financial market,Doctor Page is proficient at technical analysis on multi-national policies of central banks as well as basic economic environment and is highly sensitive to both short-term and mid-line markets with a favor on trade models featured by small costs ,hefty returns and high chance for success.
Trade on-the-go with Fish.Pro’s mobile crypto trading app
Click here to download for iOS or Android
Find us on
Official website：https://fish.pro/#/
Telegram: https://t.me/fish09921
Twitter: https://twitter.com/FishProOfficial
Facebook: https://www.facebook.com/FishProOfficial
Reddit Community：https://www.reddit.com/r/FishProMedium/
Medium: https://medium.com/@FishPro
