Home » Gold trading reminder: Gold prices rebounded from a one-week low, and the long-short game may intensify Provider FX678

Gold trading reminder: Gold prices rebounded from a one-week low, and the long-short game may intensify Provider FX678

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Gold trading reminder: Gold prices rebounded from a one-week low, and the long-short game may intensify Provider FX678
Gold trading reminder: Gold prices rebounded from a one-week low, and the long-short game may intensify

During the Asian session on Tuesday (November 22), spot gold fluctuated and rose slightly. It is currently trading around 1743.10 US dollars per ounce, recovering part of the overnight decline. The US dollar gave up some overnight gains, providing gold with rebound momentum. It fell in the first trading day, and the short-term downward momentum has weakened, and the gold price has now completed the confirmation of the support around 1735.02, and some bulls have re-entered the market.

The probability of the Fed raising interest rates by 75 basis points in December rebounded slightly

There are still many Fed officials who will speak this trading day, and investors need to focus on it. What needs to be reminded is that the market’s attention has begun to turn to the minutes of the Federal Reserve meeting to be released this Wednesday, although Thanksgiving will be ushered in on Thursday. Relatively speaking, the current market expectations for the Federal Reserve’s rate hike of 75 basis points in December have picked up, which is slightly bearish and bearish for gold prices. Investors need to pay attention to changes in market expectations.

According to CME “Fed Watch”, the probability of the Fed raising interest rates by 50 basis points in December to the range of 4.25%-4.50% is 71.1% (the highest was 94% last week, and 75.2% the day before), and the probability of raising interest rates by 75 basis points is 28.9% (it fell to 0 last week and was 24.8% the day before).

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Dollar rebounds to more than one-week high

Gold prices fell 0.67% on Monday, falling for the fourth consecutive session, hitting a six-session low of $1,732.40 an ounce during the session, as the dollar and U.S. bond yields continued to rebound, putting pressure on gold prices.

It rose 0.77% on Monday, hitting a six-day high of 108.00 at one point, and closing at 107.82. Concerns about the epidemic in Asia have generally put pressure on non-US currencies, and the safe-haven demand for the US dollar has picked up. However, Cleveland Fed President Mester expressed support for slowing down the pace of interest rate hikes starting in December, and San Francisco Fed President Daly said that the peak interest rate is about 5%, which is lower than the previous statement of 5.25%, which makes the dollar bulls still have scruples .

U.S. Treasury yields of most maturities climbed on Monday, helped by expectations that the Federal Reserve will raise interest rates further.U.S. 10-Year Treasury YieldThe gold price rose 0.24% on Monday to close at 3.827%, but the momentum of the rebound has weakened, and gold bears need to be vigilant. If U.S. bond yields resume their decline, it may provide an opportunity for gold prices to resume their gains.

John Luke Tyner, fixed income analyst and trader at Aptus Capital Advisors, said: “You continue to see that since the Consumer Price Index (CPI) was released two weeks ago, higher terminal interest rate expectations have driven the front end of the yield curve to rebound, which continues Putting pressure on long-dated bond yields.”

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ECB raises chances of less than 75 bps rate hike in December

Although the expectation of further interest rate hikes by the Federal Reserve and most central banks around the world is still suppressing gold prices in the medium and long term, this expectation has been basically digested by the market at present.What needs to be reminded is that many officials of the European Central Bank have indicated that the rate hike by the European Central Bank in December may be less than 75 basis points, which is expected to provide a chance for gold prices to rebound in the short term.

“Overall, the overall macro environment remains one of raising interest rates, which is a headwind for precious metals, with central banks continuing to seek to raise rates,” said Chris Gaffney, president of global markets at TIAA Bank.

European Central Bank executive member Lane (and chief economist) said on Monday that the European Central Bank will raise interest rates again in December, but the case for raising interest rates by 75 basis points has weakened, and the decision in December will take into account previous measures and the transmission process factors such as lag.

Portugal’s central bank governor and European Central Bank Governing Council member Centeno (Mario Centeno) also said on Monday that the ECB’s next interest rate hike may be smaller than the record 75 basis points set in the previous two meetings.

Investment bank expects global growth to slow further in 2023

On the other hand, expectations of a global economic recession are still expected to provide opportunities for gold prices to resume their gains.

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The world‘s largest investment banks expect global growth to slow further in 2023 after war and soaring inflation in 2022 sparked one of the fastest monetary policy tightening cycles in recent memory.

BNP Paribas expects global economic growth to fall to a low of 2.3% in 2023, with most major economies falling further below pre-epidemic growth trends in 2023-24.

On the whole, the short-term gold price tends to fluctuate, and the long-short back-and-forth may intensify. Although factors such as the prospect of interest rate hikes by most central banks around the world and the rebound of the U.S. dollar are putting pressure on gold prices in the short-term, the expectation of a slowdown in the pace of interest rate hikes and the prospect of a global economic recession It is expected that it will still provide support for the price of gold. At present, the price of gold has completed the confirmation of the support near the September 12 high of 1735.02 on the technical side. Investors need to beware of the possibility of the price of gold regaining its upward trend.

The current 5-day moving average resistance is around 1752.78. If the gold price can regain this position, it will add a short-term bullish signal. Below, focus on the support around 1721.96, the 38.2% retracement of the 1616-1786 rally. If the gold price rebound is blocked and breaks below this support, it will increase the bearish signal in the market outlook.

At 10:00 Beijing time, spot gold was at $1743.30 an ounce.

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