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Market News Gold market analysis: U.S. index hits a new high during the year, gold refreshes recent lows
Gold market analysis: U.S. index hits a new high during the year, gold refreshes recent lows
From a technical point of view, the overnight low of gold prices around 1728 US dollars may provide some support. If it falls below this level, it will create conditions for further decline.
2021-09-30
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The US dollar index hit a one-year high on September 29, as the market increasingly expected the Fed to reduce its asset purchases from November and may raise interest rates by the end of 2022. As the U.S. dollar continued to rise, spot gold hit a record low of $1,720.40 per ounce in the past seven weeks.
In the overnight market, the U.S. dollar index broke through the 94 mark, reaching a maximum of 94.01, the highest since November 4, 2020. The recent bottoming of the U.S. dollar index puts pressure on future gold prices. On Tuesday, Fed Chairman Powell stated in the Senate hearing that the supply bottleneck lasted longer than the Fed expected. Inflation may continue to be high in the next few months. If inflation continues to become a serious threat, the Fed will definitely take action. In conjunction with the Fed's meeting on interest rates, Taper is already imperative. It is worth mentioning that the Fed hinted last week that it may start to scale back its stimulus plan during a large-scale epidemic as early as November and end the plan in mid-2022. In addition, the so-called dot plot shows that policymakers tend to raise interest rates in 2022. This helped offset the upcoming US debt ceiling to a greater extent and continued to support the strong buying tone surrounding the dollar. In addition, risk appetite-as described by the stock market's strong rebound-further restrained the rise of safe-haven gold. The fundamental background seems firmly in favor of bearish traders. Therefore, any subsequent rise may still be seen as an opportunity to sell. Market participants are now looking forward to the comments made by major central bank governors, including Fed Chairman Powell, at the European Central Bank Forum in Sintra to seek new impetus.
From a technical point of view, the overnight low of gold prices around 1728 US dollars may provide some support. If it falls below this level, it will create conditions for further decline. Gold may subsequently accelerate its decline, further approaching the $1,700 mark, and will eventually test the year-to-date lows near $1687-80. On the other hand, the short-term resistance is located near the $1750-52 area. If it rises above this area, it may trigger a wave of short covering, which may push the price of gold to the relevant resistance near $1775. Followed by resistance near 1,783-84 USD and 1,800 psychological resistance mark.
Bank of China Guangdong Branch Wang Gang
Original title: 20210930—The U.S. refers to a new high this year, and gold refreshes its recent low
Source: Bank of China official website
In the overnight market, the U.S. dollar index broke through the 94 mark, reaching a maximum of 94.01, the highest since November 4, 2020. The recent bottoming of the U.S. dollar index puts pressure on future gold prices. On Tuesday, Fed Chairman Powell stated in the Senate hearing that the supply bottleneck lasted longer than the Fed expected. Inflation may continue to be high in the next few months. If inflation continues to become a serious threat, the Fed will definitely take action. In conjunction with the Fed's meeting on interest rates, Taper is already imperative. It is worth mentioning that the Fed hinted last week that it may start to scale back its stimulus plan during a large-scale epidemic as early as November and end the plan in mid-2022. In addition, the so-called dot plot shows that policymakers tend to raise interest rates in 2022. This helped offset the upcoming US debt ceiling to a greater extent and continued to support the strong buying tone surrounding the dollar. In addition, risk appetite-as described by the stock market's strong rebound-further restrained the rise of safe-haven gold. The fundamental background seems firmly in favor of bearish traders. Therefore, any subsequent rise may still be seen as an opportunity to sell. Market participants are now looking forward to the comments made by major central bank governors, including Fed Chairman Powell, at the European Central Bank Forum in Sintra to seek new impetus.
From a technical point of view, the overnight low of gold prices around 1728 US dollars may provide some support. If it falls below this level, it will create conditions for further decline. Gold may subsequently accelerate its decline, further approaching the $1,700 mark, and will eventually test the year-to-date lows near $1687-80. On the other hand, the short-term resistance is located near the $1750-52 area. If it rises above this area, it may trigger a wave of short covering, which may push the price of gold to the relevant resistance near $1775. Followed by resistance near 1,783-84 USD and 1,800 psychological resistance mark.
Bank of China Guangdong Branch Wang Gang
Original title: 20210930—The U.S. refers to a new high this year, and gold refreshes its recent low
Source: Bank of China official website
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