Gold and precious metals

Gold and precious metals

With the sharp fall of the US dollar on Monday, the price of gold rebounded strongly, and the commodity and capital markets also rose sharply. Has the phased downturn in the gold and risk markets come to an end? I think it is too early to make such a conclusion. The price of gold generally remained within the range of US$1600 to US$1700 we gave earlier, which is a weak rebound after a dip near US$1532. Although we believe that in the medium term, the trend of the dollar may not have a strong impact on the operation of gold prices. But in the short term, the negative correlation between the US dollar and gold and the risk market is obvious, that is, if the US dollar rises, the gold market and the risk market will be suppressed. As the dollar falls, the gold market and risk market will strengthen. Is the sharp fall of the US doGold and precious metalsllar on Monday the beginning of a new round of decline after a period of weak rebound, or a further upward relay callback? The author believes that the recent fall in the U.S. dollar is a relay adjustment for a further upward swing. The U.S. dollar will have an accelerated upward pattern in the periodical outlook. We believe that the most conservative target should be above 88 points, that is, slightly above the current 77 points where the U.S. dollar is currently located. In terms of location, there is still a lot of upside. If this is the case, the risk market will inevitably be further suppressed, and the gold market should at least be suppressed accordingly. Therefore, regarding the recent rebound in gold prices and the risk market, I think it may be more appropriate to treat it as a rebound.

Previously, relevant parties in the United States had announced that their domestic demand for gold coins had set a historical record. At the same time, the poor economic data in the United States may force the Fed to continue its debt purchase measures for a longer period of time. This indicates that the price of gold should rise sharply. But in fact, this situation did not happen, which shows that the gold market has not got rid of the previous weak pattern. If the dollar rebounds thereafter, the price of gold may usher in a new wave of sharp decline.

Changes in the geopolitical situation have led many investors to turn to gold and the US dollar. Driven by safe-haven buying, the international spot gold continued to rise. The price of gold broke through the US$1200 mark in North American trading on Tuesday (25th). On Wednesday (26th), the price of gold in the Asian market rose again, reaching a high of US$1203.7. At the same time, the U.S. dollar also rose against major currencies, with the U.S. dollar index hitting a one-year high of 87.40.

The State Council issued the "Decision on Cleaning up and Rectifying Various Trading Places and Effectively Preventing Financial Risks." Many mainland exchanges, including the Tianjin Precious Metals Exchange, are only approved by the local government and are copycat gold exchanges. Due to the fact that there are more Internet access points in the Guangzhou market, investors in Guangzhou often leave the market to wait and see developments due to concerns about the survival prospects of the Stock Exchange.

This trading day will announce seasonally adjusted retail sales in Australia in July and actual retail sales in July in Switzerland. German Finance Minister Wolfgang Schaeuble delivered a speech on how to save the euro at a conference hosted by the French National School of Administration (ENA). The Deputy Governor of the Swiss National Bank Jordan delivered a speech at the Swiss Capital Markets Forum of the New Zürich (NZZ), titled the many challenges that Switzerland faces as a financial center. In addition, markets in the United States, Switzerland and Canada are closed due to Labor Day.

This Thursday (December 17) at 03:00 the Fed will announce the December policy statement, and then at 03:00 Fed Chair Yellen (JGold and precious metalsannet Yellen) will chair a press conference. According to data on interest rate futures, the Fed’s probability of raising interest rates this week is more than 70%, almost since the rate hike is on the horizon.