Archives of “March 3, 2020” day

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Gold trades to new session highs

  
Analysis, Gold / Silver

Dollar fall helping the precious metal rise

The price of gold is trading 2 a new session high at $1647.40. That is up about $58 on the day or 3.65%.
Dollar fall helping the precious metal rise_
Looking at the daily chart below, the price tumbled on Friday as stocks tumbled. Typically might expect gold to move higher on safe haven flows. However the markets (or at least the story) was that traders were liquidating gold gains to pay for margin calls in stocks. Whether true or not is unsure, but the decline in equities currently (Dow is down -400 points) is not having a dampening effect on the price of gold.
Technically, the fall on Friday did find support buyers near the 50% retracement of the move up from the November 2019 low at $1567.51. The 50 day moving average was also near that level providing some support.
Currently the price on the daily chart has the high price from last week at $1689.31 as a topside target.
Drilling to the hourly chart below, the price today has move back above its 100 and 200 hour moving averages. Those moving averages currently come in at $1619.99 and $1632.48. Stay above those moving averages keeps the buyers happy. On the topside, the high price from last Thursday reached $1660.38. That was before the sharp move lower on Friday.

European shares hold onto gains but off the highest levels

  
Analysis, Global Indices

Major indices climb in Europe

The good news for the European stock markets today is that they closed higher on the day the bad news is that the close well off session highs. The oversized afternoon gains yesterday in the US gave the indices a boost at the outset, but those gains were eroded through the day. The closing levels are showing:
  • German DAX, +1.08% vs a high intraday percentage gain of 3.5%
  • France’s CAC, +1.12% versus a high intraday percentage gain of 3.3%
  • UK’s FTSE 100, +0.95% versus a high intraday percentage gain of 2.88%
  • Spain’s Ibex, +0.80% versus an high intraday percentage gain of 3.12%
  • Italy’s FTSE MIB, +0.43% versus a high intraday percentage gain of 3.16% him

Dollar falls after 50 basis point cut by the Fed

  
  Analysis
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Stocks reverse losses

The dollar is falling after the 50 BP cut by the Fed:

EURUSD:  The EURUSD has moved up to retest the highs from yesterday at 1.1184 and stalled the price has backed off a bit (into the mid 1.1160s).
USDJPY:  The USDJPY is sitting in the range after a small dip to new session lows. The price moved to 107.55. The lows from yesterday are down at 107.350 and 107.396.  The price is moving higher (or slow to move lower) as “risk on” flows are helping that pair
GBPUSD: The GBPUSD is moving to a new session high and looks toward the falling 100 hour MA at 1.28417.  The new high for the day reached  1.28235.
AUSUSD: The AUDUSD has moved to a new session high continuing the run after the RBA rate decision. The price is looking toward the 100 bar MA on the 4-hour chart at 0.66386.  Earlier today, the price extended above its 200 hour MA at 0.65743 for the 1st time since Feb 17th.

Fed cuts interest rates by 50 basis points in first emergency move since financial crisis

  
  Analysis

Emergency cut from the FOMC

The Fed says the virus poses evolving risks and the vote was unanimous. The statement said the FOMC is closely monitoring developments and act as appropriate. They also said the fundamentals of the US economy remain strong.
Powell will hold a press conference at 11 am ET (1600 GMT).
The S&P 500 has turned a 30 point decline into a 45-point gain.  Gold is also climbing and the US dollar is falling against commodity currencies.

New York and Tokyo confirm new coronavirus cases plus other virus tidbits

  
  Analysis

CBS says a case confirmed in Westchester county

CBS says a case confirmed in Westchester county
Reuters reports that a Bronx-area high school was closed today because of a suspected case.
Kyodo reported earlier that a woman in her fifties in Tokyo tested positive for the virus.
Other news:
  • Iran’s oil minister won’t attend the OPEC meeting because of coronavirus worries
  • Iran’s head of emergency services has been infected
  • Oman’s cases double to 12 from 6
  • 5 suspected cases in Botswana tested negative
  • Malaysia cases rose by 7 to 36
  • 11 cases have been confirmed in Iceland, 10 traveled from Italy and one from Austria
  • 12 new UK cases

G7 says ready to take action, including fiscal tools, where needed

  
  Analysis
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The US Treasury releases the G7 statement on its website

The full statement:

Yeah, not a whole lot in there to really reassure the market that there is going to be a firm commitment for coordinated fiscal and monetary stimulus.
Meanwhile, Japan’s finance minister says that the policy response to the virus will vary from country to country. I guess that pretty much says that not everyone is going to be taking immediate action at this stage – not like the BOJ has much of a choice anyway.

Iran confirms 835 new coronavirus cases, brings total tally to 2,336 cases

  
  Analysis
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11 new deaths are reported as well, taking the total to 77 deaths

Not good news for Iran as the number of cases pick up. Again, I would say that the real fear for most countries isn’t so much about the mortality rate but instead what happens if a significant portion of the population starts to contract the disease.
It is all about the disruption, economic consequences and medical capacity to cope. Until there is a cure/vaccine that is able to prevent people from being admitted to hospitals for a few weeks, the current situation may continue for some time yet.
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