On Monday (July 29), the Asian spot market, the international spot gold is located in the area of ​​1422.00 US dollars / ounce. The price of gold in the previous trading day fluctuated, and the upper and lower jumps finally closed up at 1418.60 US dollars per ounce on the Yangxian line. The trading volume continued to maintain a moderate rebound momentum.
(Spot gold daily chart chart provided by TradingView)
On the previous trading day, the international spot gold opened at 1414.42 US dollars / ounce, the lowest test was 1413.38 US dollars / ounce, the highest rose to 1424.60 US dollars / ounce, to close at 1418.26 US dollars / ounce, up 3.86 US dollars, or 0.27%.
At 02:00 Beijing time on Thursday, the US Federal Open Market Committee (FOMC) will announce interest rate resolutions and policy statements. Then at 02:30 Beijing time on Thursday, Federal Reserve Chairman Powell will hold a press conference.
In a recent survey of 111 economists, 95% of economists believe that this time the Fed will cut interest rates by 25 basis points. Two economists believe that the Fed will cut interest rates by 50 basis points, and two other economists believe that the Fed will not move.
Charlie Nedoss, senior market strategist at LaSalle Futures Group, said that at a rate cut of 25 basis points, gold prices are most likely to fall and test the $1400/oz level.
McKay added that overall, for investors, gold is expected to provide a huge long-term buying opportunity. He said: "Ultimately, any downside will be a longer-term buying opportunity. As the global central bank turns to this loose tone, gold is well supported."
Technical analysis:
Recently, the US dollar index has closed up by the Yangxian line for 6 consecutive trading days. The previous trading day extended its gain to 98.10, and it is temporarily under pressure from the high level. 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 below the above high level. The MACD green kinetic energy column is looming, and the KDJ stochastic indicator continues downwards, suggesting that the short-term upside momentum of the US dollar is insufficient, or it continues to be under the high level.
Technically, the price of gold temporarily rebounded moderately. The daily MACD green kinetic energy column narrowed, and the KDJ stochastic indicator continued downwards, indicating that the overall price of gold will continue to retreat since the high of $1,452.80 per ounce.
On the 4 hours chart, gold temporarily showed a fairly narrow trading pattern. The MACD red kinetic energy column loomed, and the KDJ stochastic indicator turned sharply higher, indicating that the gold price will rebound in the short-term.
Fundamental positive factors:
1. The report released by the US Department of Commerce last Friday showed that the initial quarterly rate of real GDP in the second quarter of the United States increased by 2.1%, the lowest since the fourth quarter of 2018, with an expected increase of 1.8% and a previous increase of 3.0%. The data may support the Fed’s interest rate cut this week, which is good for the dollar’s ​​negative.
2. The White House announced on Friday that the 301 investigation of the French digital tax was initiated. White House officials said that in addition to the trade investigations that have been launched, the government is paying close attention to all other policy instruments and seeking to respond to the French digital tax. France’s launch of a digital tax shows France’s lack of commitment to ongoing OECD negotiations.
3. Trump said on Friday that he did not rule out the possibility of introducing measures to curb the dollar's strength. Trump told reporters: "The dollar is very strong and the country is very strong. The strong dollar is a good thing, but it makes the United States more difficult to compete."
4. The Swiss National Bank said on Friday that the regulatory agreement on the sale of gold will expire on September 26. The signatories to the Central Bank's Gold Sale Agreement confirmed that gold remains an important part of global foreign exchange reserves and there is no plan to sell gold on a large scale. At the same time, the European Central Bank also stated that the central bank in the central bank's gold sales agreement has no plans to sell gold on a large scale.
Fundamental negative factors:
1. After the release of US GDP data on Friday, U.S. national economic adviser Kudlow said that GDP growth is not easy under the condition of raising interest rates seven times. He believes that the GDP data is very good. He said that the United States hopes that the US dollar will remain the dominant currency in the world, and President Trump wants a stable dollar. Kudlow also pointed out that the White House has ruled out any foreign exchange intervention.
2. European Central Bank President Mario Draghi did not issue a clear easing signal at the press conference on Thursday. 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.
3. The number of people filing for unemployment benefits in the United States announced on Thursday to July 20 was further reduced to 206,000, better 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 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.