On Friday (July 26), the Asian spot market, the international spot gold is located in the area of 1416.70 US dollars / ounce. The price of gold in the previous trading day fluctuated. It rose strongly to a daily high of 1,433.70 US dollars per ounce. After that, it fell sharply from over 20 US dollars to a low of 1410.83 US dollars per ounce. It has rebounded from the low point.
(Spot gold daily chart chart provided by TradingView)
On the previous trading day, international spot gold opened at 1425.28 US dollars / ounce, the lowest test was 1410.77 US dollars / ounce, the highest rose to 1433.60 US dollars / ounce, to close at 1414.40 US dollars / ounce, down 11.18 US dollars, a decrease of 0.78%.
There were two major reasons behind the sharp fall in gold prices from high levels on Thursday.
First, European Central Bank President Mario Draghi’s dovish at the press conference was less than market expectations. The gold’s gains benefited partly from the loose prospects of the major central banks, and the European Central Bank’s easing was less than expected, which made gold safe haven. Demand is weakening.
Second, the US economic data released on Thursday showed good performance, which caused the market to cool down the Fed's expectation of a sharp rate cut next month. The data shows that the number of people filing for unemployment benefits in the United States to July 20 was further reduced to 206,000, which was less than the expected 219,000. At the same time, the US durable goods orders in June recorded a monthly rate of 2%, far exceeding the expected value of 0.7%.
This trading day will focus on US GDP data. Given the approach of the Fed's interest rate decision, this report is crucial for the Fed's interest rate trend and is expected to trigger market volatility again.
At 20:30 Beijing time on Friday, the US will announce the initial value of the second quarter gross domestic product (GDP), which may have an important impact on the Fed's next week's resolution. Given the importance of GDP data, the market may fluctuate again after the data is released.
According to an authoritative media survey, the annual rate of real GDP in the second quarter of the United States is expected to increase by 1.8%, down from 3.1% in the first quarter.
Analysts pointed out that if the US GDP data is strong, it indicates that the US economy is more resilient, which may reduce the market's expectation of the Fed to cut interest rates by 50 basis points. This will boost the dollar's movements and thus suppress the price of gold. Conversely, if the data is weak, it will cause the dollar to sell off, and gold will start a counterattack.
Recently, the US dollar index has closed up by the Yangxian line for five consecutive trading days. The previous trading day extended the gains to a high of 97.93, and the current temporary temporary pressure from the high level fell back. On the daily chart, the MACD red kinetic energy column is steady, and the KDJ stochastic indicator is still on the upside, indicating that the dollar's rising momentum remains, and then continues to expand the upside.
On the 4 hours chart, the US dollar index is temporarily trading in a narrow range near the high level. The MACD green kinetic energy column is unchanged and the entity is narrow. The KDJ stochastic indicator is slightly downward, suggesting that the short-term upside momentum of the US dollar is suspended, or continues at a high level. A narrow range of consolidation around for a while.
At present, the gold price temporarily rebounded moderately from the low level. The daily MACD green kinetic energy column is enlarged, and the KDJ stochastic indicator continues to fall, indicating that the gold price will further extend the retracement since the high of $1,452.80 per ounce.
On the 4 hours chart, the gold temporarily appeared in a narrow range, the MACD green kinetic energy column was steady, and the KDJ stochastic indicator was downward, indicating that the short-term gold price will also be under pressure.
Fundamental negative factors:
1. On Thursday, European Central Bank President Mario Draghi did not issue a clear easing signal at the press conference. He said that the risk of recession in the Eurozone is low, and the ECB Council did not discuss the scale of interest rate cuts on Thursday. Earlier, the gold gains benefited partly from the loose prospects of the major central banks, and Draghi’s dovish degree was less than expected, which weakened the safe-haven demand for gold.
2. The number of people filing for unemployment benefits from the United States announced on Thursday to July 20 was further reduced to 206,000, better than the expected 219,000.
3. The monthly rate of US durable goods orders announced on Thursday was 2%, far exceeding the expected 0.7%.
4. The spokesman of the Ministry of Commerce said on Thursday that in order to implement the consensus reached between the two heads of state in Osaka, the leaders of China and the United States will meet in Shanghai, China on July 30-31, on the basis of equality and mutual respect. The 12th round of China-US high-level economic and trade consultations. It is reported that China has approved the purchase of corn, cotton, pork and other commodities from the United States and exempted punitive tariffs.
5. On Thursday, the US Secretary of State said after launching a missile in North Korea that the diplomatic gate is still open to North Korea.
Fundamental positive factors:
1. On Friday, according to the latest market news, US President Trump said that North Korea only tested smaller missiles. At the same time, according to market news, the South Korean side said that the North Korean missile's flight distance is at least 600 kilometers.
2. On Thursday, the new British Prime Minister Boris Johnson demanded the abandonment of the Irish reserve, but was rejected by the European Union.
3. The initial value of the Markit manufacturing PMI for the US in July was 50, lower than the previous value of 50.6 and the expected 51, the lowest since September 2009. Manufacturing and services PMI data indicates that the US economy is growing at an annual rate of only 1.6%, a slight increase from the 1.5% shown in the second quarter. After the release of the data, the dollar fell and gold turned higher.
4. The total number of new home sales in the United States announced on Wednesday was 666,000, which was less than the expected 660,000, with a previous value of 626,000.