gold 2020 forecast review – Fresh Chinese Government Stimulus Supports Higher Prices

gold 2020 forecast review – Fresh Chinese Government Stimulus Supports Higher Prices

gold 2020 forecast review – Fresh Chinese Government Stimulus Supports Higher Prices

 

gold price usa futures are trading higher on Thursday, but well-off their high of the session. Fear over the coronavirus’ impact on China’s economy helps to underpin the market, while stronger-than-expected U.S. economic data helps to place a lid on prices today. Traders are being primarily guided by falling U.S. Treasury yields and lower demand for risky assets

At 13:49 GMT, April Comex gold is trading $1584.00, up $8.00 or +0.52%

Coronavirus’ Effect on China’s Economy

On Wednesday, a Chinese government economist projected the outbreak would cut China’s first-quarter growth by one percentage-point to five or lower, possibly pushing policymakers into introducing more stimulus measures

gold price usa The fast-spreading outbreak, which has killed quite 130 people and infected almost 6,000 in China, could cut first-quarter GDP growth by about 1 decimal point , Caijing magazine quoted Zhang Ming as saying

“GDP growth within the half-moon of 2020 might be about 5.0%, and that we cannot rule out the likelihood of falling below 5.0%,” Zhang said

Zhang, an economist at the Chinese Academy of Social Sciences – a top government think factory – said his forecast was supported the idea that the outbreak will peak in early to mid-February and end by the top of March

China’s growth slowed to a near 30-year low of 6% within the fourth quarter, and analysts have said they expect the epidemic to tug on the economy

gold price usa Zhang estimated its impact on China’s economy might be significantly bigger than that of Severe Acute Respiratory Syndrome (SARS), a coronavirus that originated in China and killed nearly 800 people globally in 2002 and 2003

Domestically, the outbreak has hit sectors including transportation, tourism, catering and entertainment. Zhang said it could weigh down jobs, with the official survey-based percentage likely to exceed 5.3% within the coming months, Zhang said

Central Bank, Government Stimulus could also be Coming

gold price usa In response, the govt is probably going to intensify policy support, which could boost the annual deficit as a share of GDP to over 3% in 2020, he said. The People’s Bank of China could further cut banks’ reserve requirement ratios and interest rates, Zhang added

Economic growth could recover later this year, bringing the full-year expansion to five 7%, Zhang said. In 2019 growth was 6.1%, the weakest in 29 years

Daily Forecast
gold price usa Any talk about further easing by a financial institution or government stimulus tends to be supportive for gold. So a worsening virus outbreak will weaken the economy further, bringing the govt closer to more stimulus. this could underpin prices over the near-term