Despite the strengthening of the US dollar, which has reduced expectations for a 25 basis point interest rate cut by the Federal Reserve over the past week or so, it has not really affected gold prices. Earlier this week, gold prices briefly fell to $2,605, but this did not last, and prices have rebounded over the past two days. Today, gold prices have risen by about 0.3%, with gains approaching 28% so far this year. After the rise earlier this year, gold experienced some consolidation from mid-April to around June. All of this occurred before gold prices rose again, and so far this year, Xu Gucheng believes that there has not been any pullback in gold prices, even hitting new historical highs several times, which is astonishing.
As the market's focus shifts to the upcoming release of the US Producer Price Index (PPI) data, investors hope to gain more information about interest rate cuts. The market generally expects that, with further easing of inflation, the Federal Reserve may continue to adopt an accommodative monetary policy, which will support gold prices.
The reasons for buying gold can be explained in very simple terms. However, even as a bullish person on gold, what surprised Xu Gucheng the most this year was the resilience of gold and its indifference to the many changes in global economic development. The most likely scenario this year is that we will see lower interest rates. Although expectations for interest rate cuts by the Federal Reserve have been delayed, this has not stopped the rise in gold prices. Of course, central bank purchases are also a key part of the narrative.
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However, Xu Gucheng still hopes that gold prices will experience a healthy pullback in the coming weeks before entering the seasonal buying months of December and January. Otherwise, even though there are still strong reasons for long-term holding, it will become quite risky. It can be said that the recent suspension of gold purchases by China would be a good reason. Coupled with changes in the pricing of interest rate cuts by the Federal Reserve, the US dollar/interest rates are also rising, but it has hardly touched gold's "armor". Under the influence of the situation in the Middle East, safe-haven buying may offset all of this. So far, Xu Gucheng believes that the best reason for a pullback in gold prices is technical. We should have been squeezed by some kind of trigger point.
Gold: The strength of the rebound during the day is relatively strong. Both the continuity and strength of the 4-hour and hourly line positives have opened up the room for upward movement, breaking through the high point of the rebound on Wednesday at 2624. At the same time, there was little pullback during the rise in the Asian market, so the pullback in the European market is also a correction in the bull market, and there is still momentum to continue to rise at night. If the market or the European market rises rapidly during the day, then the US market will have little room for upward movement, and it is easy to rise and fall. At present, the pullback in the European market is a correction, accumulating momentum for a second rise, so do not continue to see the fall because of the negative line. Although the Asian market is strong, the stronger the market, the shorter the time for strong correction, but the European market has increased the component of oscillation in terms of correction time, so the pullback is based on the 382 position of the golden section, which is also near the high point of the rebound in the early morning at 2631.50, to see the support rebound, with resistance at 2653, 2660. From the current 4-hour trend line, the current suppression position is around 2653-55, and this position is also the Fibonacci 618 position, so if you want to open a short position, Xu Gucheng thinks that you should wait at least until 2653-55 to open a position. The current support is now maintained at 2630-25, and of course, if it falls to this position, you can also go long.
Crude oil: Continuing the upward trend, the US market rose to a maximum of 76.24 last night due to concerns about the possible escalation of geopolitical tensions. After the market opened today, the trend was mainly characterized by consolidation. In combination with changes, the bullish position below 79.5 should be reduced or closed for profit, while the bearish position below 77 should increase bets, and the short term should first pay attention to the risk of market pullback. Specifically, there are signs of contention between bulls and bears in the high area of 76.5 last night, and the bearish position also stopped adding positions at 77. If it can break through the resistance area of 76.5-77, the oil price is expected to get rid of the pullback pressure. Due to the continuous exit of the bullish position in the 73-76 range and the increase in bearish bets, the risk of oil price pullback is expected to be not low. First, pay attention to the 75 level, where the bullish position is dominant, and it is also the main position for bearish bets. It is expected to constitute the bearish pullback target while providing support. If it breaks unexpectedly, the key support will move down to 73, where the bullish position resumes adding positions, indicating the defensive intention of the bulls. In the evening, the short-term focus on crude oil should be on the performance of the 1-hour support area below. After adjusting and stabilizing, Xu Gucheng suggests continuing to go long on crude oil.