ZFX: China-US tensions boosted safe haven demand! Precious metal is testing higher
Friday (May 15) Review
Market sentiment turned to positive on Friday, supporting the three major Wall Street indexes regained the lost made in the early session. Investors were cautious but they are still looking forward to the reopening of the global economy.
Although the bearish factors seem to be more obvious, investors now are expecting more stimulus policies ahead, especially after the bleak economic figures like retail sales of US in April, which falling 16.4%, the biggest monthly drop since the 1992 record.
But, the market trend showed that the investors seems already expected such situation. Risk appetite returned and the stock market bounced back in the late session on Friday.
The tension between China and the US has been further escalated. The US announced its plan to further restrict Huawei to develop semiconductors using technologies from the US. China said that it would take all necessary measures to safeguard Chinese firms’ rights and interests, and was ready to put U.S. companies on an “unreliable entity list” as countermeasure.
The global pandemic is still severe, with more than 4.7 million confirmed cases worldwide and more than 310000 deaths. Currently, the market is closely monitoring the risk of a second wave of outbreaks around the world.
ZFX analyst Jacob Leung said that gold market was benefited due to the rising tension between China and the US. However, the “risk off” mode seems has no effect on the stock market. There may be some reason behind. It may be due to the rally of oil prices, Fed's policies or the hopes on further stimulus policies, which all are supportive to the financial markets, no matter these were just short term or sentiment oriented only.
Risk Warning: The above content is for reference only, and does not represent ZFX's position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.