2024-01-02 02:46:00
Gold market analysis: Gold prices remain stable above US$2,060 during the New Year holiday globally
On Monday (January 1), the first trading day of 2024, as most of the global markets were still on holiday, the movement of gold was limited, and the international spot gold price remained stable near the level of US$2,062.
Last week, boosted by the weakening of the U.S. dollar, spot gold rose for the third consecutive week, with the price of gold closing at $2,062.74 per ounce, a weekly increase of 0.5%. Spot gold hit a high of $2,088.43 per ounce intraday last week. What drove gold’s performance last week was mainly the expectation of very aggressive interest rate cuts that drove the precious metal’s gains. The market is pricing in the Federal Reserve cutting interest rates in March and cutting interest rates by a total of 150 basis points in 2024. Following an unexpectedly strong performance in 2023, some institutions now expect gold prices to rise further in 2024, which will be driven by three major drivers: momentum-chasing hedge funds, continued and steady purchases of physical gold by central banks, and exchange-traded fund (ETF) investments. re-influx of investors. Going into the new year, the theme from global central banks seems to be that lower interest rates are coming, which will be the main thread driving gold higher. A decline in the dollar and yields will directly pave the way for gold’s rise. In addition to the above reasons, there is another factor in the market, which is the expansion of the conflict between Israel and Gaza. The persistence of geopolitical risks and central bank gold purchases will support the gold market.
On a technical level, on the daily K-line chart, gold prices remain well above the middle track of the Bollinger Bands, showing that gold bulls can still maintain their advantage. The support positions below are at 2050 and 2035 respectively. If it does not fall below the 2050-2035 position, it will not form a plummeting trend. On the 4-hour chart, technical indicators are temporarily passivated, suggesting that neither the long nor short positions will be very strong and obvious. The lower track support position of the Bollinger Bands has moved up to a position near 2055, the central axis pressure position is near 2071, and the upper track position is near 2085. Taken together, before the main impact path of the new year is clarified, gold is expected to temporarily fall into a narrow range trading mode this week, and there will not be much chance of a directional breakthrough.
Wang Gang, Bank of China Guangdong Branch
These are my personal views only and do not represent the views of my institution.
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