Gold was in an Underpressured situation on Monday trade. Now that precious metal is in it’s lowest level from many years. 

Now, it is going go the lowest position last week in $ 1,850,47. The COVID-19 pandemic in China has been darkening the risk sentiment prospect at the beginning of last Sunday. 

Reuters reported that Shanghai has been tightening it’s COVID-19 lockdown which was tight before. It was in a new push to delete infection outside the biggest city in China quarantene at the end of this month. 

The market participants are now waiting for the further news from China. So far, the speculation raising is about the export growth and import weakening situation.

That Speculation is Based on Certain Condition

The speculation Or predictions explained above may be happened due to several conditions. The examples are like several lockdown forms and Shanghai is in a one month restriction without any exception. 

Market is now facing some challenges such as a stronger dollar and obligation sell action. The cause is The United States Federal Reserve which tightened their monetary policies. 

The same issue starts to weight on the Gold’s price which notes it’s third week decline action. Another challenge is about the stock where it is so complicated for this basic metal. 

The selling action is just too much and different possibilities may occur. Analysts predict that the China’s demand will experience a sharp rebound after that restriction is loosened. 

Stimulus is a Good Plan to Fix the Economy

The economy may be broken because of this moment. That is why; government will find the right action to fix the situation and it seems stimulus will be one of those plans. 

Stimulus is a great weapon to activate the economy. Meanwhile, for a week ahead, besides the China’s trading data this day, market participants will focus on the United States inflation data. 

One of the speaker from Fed and analysts in TD securities said that inflation may still strong in April. It got the momentum to become 0.5% per month after noted a 0.3 percent level in March. 

Some of the Fed’s official will give their opinions next week after the May meeting. John William Christopher Waller as a Governor gave their statement and that will be essential. 

Elsewhere, the NZD/USD Declined to It’s Lowest Level 

It is hoped that the statement delivers a good explanation. The reason is because Powell was unable to give any clear information about his further steps. 

Elsewhere , the NZD/USD pair slumped and went to it’s lowest level at 0.6400. The bearish bias can be related to the market expectations where the condition could be more difficult ahead.

It is because a tighter monetary policy and the negative risk main news which comes from Chine. Everything is also related to Russia. On Sunday, it failed to bring any changes in a dark market nuance. 

The cause is a challenge to a risk profile is still hard ahead of the major inflation number from the America, new Iceland, and China. This also weighted on the dollar Kiwi. 

Pandemic is Still Becoming a Concern

It cannot be denied that the COVID-19 situation is still becoming a concern. The other concerns are for sure the new partner of new Iceland and the West Countries sanctions for Russia. 

The Fed tries to hold themself from a 75 basis point interest RaTe increase. The major news about the US jobs report failed to balancing a weaker prediction and maintain it’s pressure on the US central bank. 

A tighter monetary policy must be applied as soon as possible. The long term real interest rate has the biggest effect for a credit demand and financial condition is almost reaching a neutral level.