On Tuesday (July 30), the Asian spot market, the international spot gold is trading at 1423.30 US dollars / ounce level. On the previous trading day, the price of gold fluctuated and went up. The second consecutive trading day closed up with the Yangxian line. At present, it is temporarily oscillating and falling.
(Spot gold daily chart chart provided by TradingView)
On the previous trading day, international spot gold opened at 1418.79 US dollars / ounce, the lowest test was 1414.60 US dollars / ounce, the highest rose to 1428.00 US dollars / ounce, to close at 1426.63 US dollars / ounce, up 8.34 US dollars, or 0.59%.
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.
Bluford Putnam, managing director and chief economist at CME Group, said investors should be cautious when observing the bond market's sharp interest rate cuts. Gold prices may have peaked this year as the Fed’s action is not expected to be as expected. In this environment, gold will not be purchased.
Putnam claims, "If the Fed does not take a truly radical interest rate cut, it will be difficult to see gold prices go higher. If you cut interest rates four times this year, then you will fall in love with gold, but if the Fed cuts interest rates in July, it may be again by the end of this year. Cut interest rates once, then gold may have the best performance."
Technical analysis:
Recently, the US dollar index has been holding steady and soaring. It has closed for 7 consecutive trading days, and this trading day further extended the gains to a high of 98.18. On the daily chart, the MACD red kinetic energy column is steady, and the KDJ stochastic indicator continues to rise, indicating that the dollar's rising momentum is still strong, and it is expected to continue to expand the upside.
On the 4 hours chart, the US dollar index held steady and the MACD green kinetic energy column narrowed slightly. The KDJ stochastic indicator turned upwards, suggesting that the US dollar short-term also regained its upside momentum, and it is expected to launch a stronger rally.
The price of gold temporarily showed a turbulent decline. The green momentum of MACD was stable, and the KDJ stochastic indicator was slightly downward, indicating that the price of gold continued to fluctuate.
On the 4 hours chart, gold temporarily showed a fairly narrow trading range. The MACD red kinetic energy column narrowed and the KDJ stochastic indicator went lower, indicating that the short-term gold price will continue to fluctuate.
Fundamental positive factors:
1. With the Federal Reserve's (FED) monetary policy meeting approaching, US President Trump released three tweets on Monday, once again slamming the Fed to excessively limit interest rates, and said that this week's "small" rate cut is not enough.
2. British Prime Minister Boris Johnson saidon Monday that he would not negotiate with the EU on the issue of Brexit unless the EU leaders agreed to renegotiate the pre-existing Teresa May and the European Union. So far, EU officials have rejected Johnson’s request.
3. The new British foreign minister and former Brexit chief negotiator Rab said on Monday that the Irish border guarantee clause reached by the Teresa May government and the EU was “unacceptable”.
4. 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%, which was the lowest since the fourth quarter of 2018. It is expected to increase by 1.8% and the previous value will increase by 3.0%. The data may support the Fed’s interest rate cut this week, which is good for the dollar’s ‚Äč‚Äčnegative.
5. 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.