On Tuesday (January 14), the international spot gold was at US $1537.40 per ounce in the Asian market morning trading. Affected by the fall of risk aversion in the market, the gold price retreated under pressure on the previous trading day and closed down at the negative line. Affected by the news that the United States canceled the identification of China as a "currency manipulator", the market risk aversion further cooled. The Asian gold price continued to fall this trading day, accelerating to a low of $1535.79 per ounce, falling more than $13 from the high of the day, and still maintaining the decline.

The United States has cancelled the identification of China as a "currency manipulator", saying that the "overvaluation" of the US dollar is worrying

On Monday (January 13), the U.S. Treasury Department officially abandoned the decision to list China as a currency manipulator last year, which is considered to be another sign of the thaw of Sino-U.S. relations.

The US Treasury Department said in its semi annual report on exchange rate intervention that "the Treasury Department has decided that China should no longer be listed as an exchange rate manipulator."

The US Treasury Department said that the first phase of the trade agreement to be signed this week contained China's enforceable commitment not to devalue the renminbi and not to set exchange rate targets for the purpose of competition.

It is said that the Chinese side also agreed to release information related to the exchange rate and external payments.

The US Treasury Department reported that after China "took specific measures" to devalue the RMB this summer, it listed China as an exchange rate manipulator.

The report of the U.S. Treasury Department concluded that the exchange rate policies of 10 countries need close attention, but none of the major U.S. trading partners meet the standards of the two laws on foreign exchange manipulation passed in 1988 or 2015.

Countries worthy of review include China, Germany, Ireland, Italy, Japan, South Korea, Malaysia, Singapore, Switzerland and Vietnam.

The US Treasury Department said that the real US dollar exchange rate was still 8% higher than the 20-year average, and the continued strengthening of the US dollar may aggravate the continuous trade and current account imbalance. Based on the judgment of the International Monetary Fund (IMF) that the US dollar is "overvalued" on a substantially effective basis, the continued strength of the US dollar is "worrying".

The report points out that despite President Trump's efforts to reduce the U.S. trade deficit, the trade deficit of non oil products has risen to a historical high of more than 4% of GDP.

At the same time, the US Treasury Department called on Germany, the Netherlands and South Korea to use part of their fiscal space to implement large-scale stimulus policies to promote growth.

Market analysts pointed out that the cancellation of the identification of China as a "currency manipulator" by the United States has further reduced the risk aversion in the market. In addition, the signs of the imminent signing of the first phase of the Sino US trade agreement and the easing of the situation in the Middle East have warmed up risk sentiment and restrained investors' demand for safe haven gold.

Bart melek, head of commodity strategy at Dow Jones securities, said that the risk of escalation of geopolitical tensions was eliminated, and gold was less needed to strengthen the portfolio.

The holdings of SPDR gold trust, the world's largest gold backed listed exchange fund, fell 0.9% to 874.52 tons last Friday, the lowest level since September 16, reflecting the decline in investors' interest in gold

The US House of representatives will welcome a crucial vote

On Sunday, local time, speaker of the US House of Representatives Pelosi said that Democratic members of the house of Representatives would vote on Tuesday to decide when to formally submit impeachment provisions to the Senate.

Pelosi stressed that if the Republican members of the Senate refused to call new witnesses in the impeachment trial, the Republican Party would pay a political price.

Pelosi, the speaker of the US House of Representatives, said last Friday that she would instruct the house of representatives to submit the terms of impeachment of President trump to the Senate this week.

Earlier, Pelosi repeatedly postponed the plan to submit Trump's impeachment clause because she failed to reach an agreement with the Senate on the impeachment trial provisions of US President trump.

However, Pelosi is facing increasing pressure to submit impeachment provisions, not only from Republicans, but also from Democrats.

Before these Provisions are submitted, the house of representatives still needs to vote on the impeachment of executives or the names of members of the house 

On December 8th, 2019 local time, the US House of Representatives passed two impeachment provisions against President trump, namely, "abuse of power" and "obstruction of congressional investigation".

On January 11, trump accused Pelosi and the Democratic Party, reiterating that the Democratic Party's hearings were full of "unfairness and Prejudice" and "nothing but to prove my complete innocence". Trump also declared once again that Pelosi would be "the worst speaker of the house of representatives in history".

In the trial in the Senate, if more than two-thirds of the members of the Senate found president trump guilty, trump would be dismissed and vice president Burns would take over. However, if less than two-thirds of the members of Parliament believe trump is guilty, trump will be completely pardoned and remain in office.

In the current Senate, Republicans occupy 53 seats, Democrats occupy 45 seats, and independents occupy 2 seats. Since the overwhelming majority of Republicans have expressed their support for trump, there is little chance that trump will be impeached and step down.

If there is another unexpected news in the US political arena, the market sentiment may change again. At that time, gold is expected to fluctuate greatly due to the impact.

Outlook of gold Aftermarket

David song, a foreign exchange strategist at dailyfx.com, said in a report on Monday (January 13) that with the easing of geopolitical tensions, the gold market may have reached the time for technical profit taking because the short-term momentum has begun to change.

David Song said in the report: "the relative strength indicators may trigger textbook selling signals in the next few days, because it is difficult for the volatility indicators to hold the overbought area. After the gold price failed to close above US $1591, US $1509 was the key support."

Carsten Menke, an analyst at Julius Baer, said, "we are a little tired of dealing with the details. It will be quite interesting to pay attention to whether there are any specific guidelines for the details of the first stage agreement. In addition, the news that China and the United States will hold a semi annual meeting to discuss trade issues, I think this is unexpected for the market, which may cause pressure on gold."

Todd Horwitz, chief market strategist of bubbatrading.com, wrote that although we are bullish on gold and will continue to do so until our algorithm turns bearish, from the chart, we believe that the current high point is in place. April gold and March silver will be tested at $1500 and $17.80 respectively. We are very close to turning short.

At 09:20 Beijing time, spot gold was reported at US $1537.40 per ounce.

Daily market hot spot tracking

On Tuesday (January 14), the short-term decline of spot gold suddenly accelerated and approached us $1540/ounce in the early trading of Asia market. The US Treasury Department earlier cancelled the identification of China as a "currency manipulator", which further stimulated the sentiment of market risk preference and thus suppressed the gold price. Tonight, Beijing time, the United States will release key CPI data, which is expected to trigger market fluctuations. In addition, investors will also pay attention to the latest progress of Trump's impeachment door. Democratic members of the US House of representatives will vote on Tuesday local time to decide when to formally submit impeachment provisions to the Senate. It is expected that this move will incur Trump's criticism.