Analysis of gold news: On Thursday (October 26th), spot gold continued to rise in the short term, briefly breaking this week's high to 1993 US dollars per ounce. Gold prices climbed on Thursday as the Middle East conflict continued to plague investors. Despite being boosted by the outlook for longer-term interest rates, the US dollar and bond yields (yields) remained stable. Despite the strengthening of the US dollar, gold prices continue to rise strongly, and gold continues to profit from the geopolitical situation. Despite international calls for a ceasefire, the Israeli military intensified its shelling of the southern Gaza Strip at night. Overall, concerns about the geopolitical situation will not disappear in the short term, which will continue to support gold prices.
The US dollar and benchmark 10-year US government bond yields rose after data showed that new home sales surged to a 19-month high in September, strengthening expectations for high interest rates to continue until 2024. Investors are now waiting for the results of the European Central Bank (ECB) policy and US GDP data to be released later today, with particular attention to Friday's Personal Consumer Price Index (PCE). The Federal Reserve (Fed) will announce interest rate decisions next week. The growth rate of the US economy in the third quarter may be the fastest in nearly two years. Compared to macro events or financial disasters, the impact of geopolitical events on gold is usually brief, while macro events or financial disasters may force global authorities to implement very aggressive monetary and fiscal policies. During periods of economic and political turmoil, gold is often seen as a safe asset, but rising interest rates weaken its attractiveness as it does not pay interest.
On Thursday (October 26th) in the European market, spot gold maintained a strong upward trend for the day, with gold prices currently around 1992 US dollars per ounce, rising more than 12 US dollars during the day.
FXStreet analyst Dhwani Mehta pointed out that gold prices have confirmed a bullish flag on the daily chart, while the Relative Strength Index (RSI) still points towards further increases in gold prices.
According to Mehta, gold prices are expected to rise to $2000 per ounce after breaking through key resistance of $1988 per ounce.
The recent upward momentum in the yields of the US dollar and US treasury bond bonds has not affected the gold price to rise. The safe haven buying triggered by tensions in the Middle East has stimulated a significant increase in gold prices.
Bob Haberkorn, senior market analyst at RJO Futures, stated that geopolitical concerns will not disappear in the short term, which will continue to support gold prices.
Focus on US GDP data
Mehta stated that investors remained vigilant about high-risk assets until the initial release of the US gross domestic product (GDP) for the third quarter. This data may have a significant impact on the policy outlook of the Federal Reserve.
At 20:30 Beijing time on Thursday, investors will receive the third quarter of US gross domestic product (GDP) data. The latest forecast from Wall Street shows that the US GDP growth rate will rise to over 4% in the previous quarter, marking the fastest growth rate since the fourth quarter of 2021.
According to authoritative media surveys, the initial real GDP of the United States in the third quarter is expected to increase at an annualized quarterly rate of 4.3%. The revised data released last month showed that the US economic growth rate in the second quarter was 2.1%, slowing down for four consecutive quarters.
Mehta stated that looking ahead to this trading day, the tense situation in the Middle East will help maintain stability in gold prices. However, the release of US economic data may refocus the market on the Federal Reserve's interest rate policy.
FXStreet analyst Christian Borjon Valencia pointed out that the United States will release data including third-quarter GDP, as well as durable goods orders and initial claims for unemployment benefits. If this data is favorable for the US dollar and may trigger a repricing of further interest rate hikes by the Federal Reserve, then gold prices may fall. Otherwise, it is expected that gold will further rise.
Analysis of the Prospects of Gold's Latest Technology
Mehta said that from the daily chart, it can be seen that gold prices confirmed the formation of a bullish flag after closing above the downward trend line resistance level of $1976/ounce on Wednesday.
On the 14th, the Relative Strength Index (RSI) is exploring overbought areas, indicating sufficient upward space.
Mehta pointed out that from a short-term technical perspective, there seems to be little change in gold prices, as gold is still a 'buy on dips' trade.
The gold price has already exceeded the July 20th high of $1988 per ounce, so gold buyers will launch a shock towards the five month high of $1997 per ounce, followed by the $2000 per ounce level.
Technical analysis of gold: Based on a series of factors, gold has continued to strengthen in the short term, and the daily K has regained its mid week negative line. It is clearly a bullish trend, and there is still significant pressure above the 2000 level. From a technical perspective, all moving averages are showing an upward trend and there are no signs of turning heads. The MACD energy column remains stable, while the fast and slow line crosses upwards, which is a bullish form. However, KDJ is sticking in the overbought area and there is also a risk of high level retreat; Overall, the daily trend is still bullish.
From a 4-hour perspective, short-term gains are accompanied by a pullback. Therefore, the current short-term market does not seem so strong, and 2000 is also a key pressure point. From a moving average perspective, it is still upward. The MACD energy column is shrinking, the fast and slow lines are bonding, the KDJ three lines are downward, and the K-line is also out of irregularity. Overall, the 4-hour period is a range of fluctuations, but overall it is still relatively strong. After all, the risk aversion sentiment still exists, so it is still not advisable to rush to the top in trade, but rather to focus on a pullback and bullishness;
From the short-term perspective of the hour line, the gold market this week is also a wave of multiple twists and turns, not a unilateral upward trend towards last week, but a large amount of funds smashing the market, causing severe short-term fluctuations in gold, forming a back and forth washing action. However, we can see that from this week's decline to the 1953 line, it started to rise to a high and then fell again. In the 1963 line, it rose again, and today's market also rose and retreated to the 1971 line. From the previous trend, the short-term low point is constantly rising, the high point is also constantly rising, and the low point has formed a three line, one point bullish pattern.
The short-term focus above is on the first line of resistance from 2000 to 1998,
Below, short-term focus on frontline support from 1971 to 1974.
Analysis of crude oil news: On Thursday (October 26th) in the US market, crude oil prices were trading around $83.35 per barrel. Oil prices have significantly declined in the past three trading days and accelerated their decline after the release of PMI data in Europe. The severe manufacturing and service industry data in Europe highlights the resistance faced by the European economy, raising concerns about future oil demand. In addition, according to data from the European Central Bank on Wednesday, bank loans across the entire eurozone have remained almost flat, exacerbating the difficult times ahead. The deterioration of credit conditions usually precedes an economic recession. However, the good news is that China, the world's largest oil importer, has approved 1 trillion yuan of sovereign bonds, which is the latest attempt to stimulate the economy and will boost market sentiment. The impact of the Middle East conflict on oil prices cannot be underestimated. In regions with significant global oil production, ongoing conflicts may escalate into broader regional conflicts. Traders are prepared for the possibility of a war spreading between Israel and Hamas, which could disrupt oil transportation in the Middle East - although there is little evidence of such an impact. Despite an unexpected increase in US crude oil and gasoline inventories last week, there was still a rebound. It is indeed difficult to allocate an appropriate war risk premium for crude oil now, as Middle Eastern oil transportation has not been truly affected by this conflict However, concerns about contagion still exist, so on such a day, the market may decline due to an increase in US crude oil inventories, leading to a return to risk. In response to the potential impact of the escalation of the Middle East conflict on global oil prices, governments are actively taking various measures to ensure stable and sustainable oil prices.
Shipping sources and analysts told Reuters that the punishment imposed by the United States on shipowners who transport Russian oil in violation of the G7 price limit may result in more Russian cargo being transported to ships known as the "Ghost Fleet" and away from mainstream oil tankers. This price ceiling prohibits Western companies from providing offshore services for Russian seaborne oil priced above $60 per barrel. It aims to ensure that oil continues to flow to the market while reducing Russia's energy revenue, but it has caused polarization in the global shipping market.
Firstly, relying on ships known as "ghost fleets", which have exceeded their traditional lifespan, means they are more prone to the risk of leaks and spills.
Secondly, mainstream ships only use Western services for legitimate oil transportation, including oil from Russia according to price caps.
Most industry insiders and analysts interviewed by Reuters said that the US enforcement of price caps may prevent G7 owners from participating in Russian crude oil trade in the short term. They mentioned the risk and increased cost of proving that their goods meet the price ceiling, and stated that the result may be more "ghost fleets" being used for the transportation of Russian goods.
Due to concerns about the global oil price rise causing the value of Russian crude oil to exceed the limit of $60 per barrel, Western tanker owners have reduced their transportation price caps in recent months. The main shipowners, including Teekay, Euronav, and Maersk, either did not immediately respond to Reuters' request for comment or declined to comment.
Ioannis Papadimitriou of analysis company Vortex stated that since June, the proportion of Russian crude oil exports loaded on EU ships has decreased from 35% to 20% in October.
On October 12th, the United States imposed sanctions on two oil tankers for the first time since the introduction of a price cap in December last year, claiming that they violated the price cap while using US services to transport Russian crude oil.
If energy giants tighten their requirements for ships due to sanctions, shipowners may also be hesitant to embark on Russian voyages. Industry sources say that large oil companies, including Shell and BP, have avoided using tankers known to carry Russian crude oil.
American oil giant ExxonMobil was embroiled in the storm after leasing a tanker that was sanctioned by the United States, the USS Yazakimborough. There is no indication that ExxonMobil has violated any regulations.
Just as the potential risks of global shipping costs have increased the risk premium for the shipping industry, US sanctions have increased shipping rates, shipping sources told Reuters.
For example, the oil freight rates from Russian Baltic ports to India have been particularly affected by the US price cap action, as India has been a major buyer of Russian fuel since the outbreak of the Russia Ukraine crisis.
However, the impact of the increase in Russian shipping rates has been masked by the rise in global shipping costs, as the escalation of the Middle East conflict may add a risk premium to the shipping industry. In the short term, the "Ghost Fleet" ships that can be used may be particularly popular, making charter fees even more expensive. But in the long run, the purchase of second-hand ships may increase the size of the "Ghost Fleet," said Papadimitriou of Vortex.
The "Ghost Fleet" ships are usually older and covered by non Western insurance, rather than Western insurance, which the US Treasury has warned of, given the potential environmental risks.
On the same day as the sanctions were announced, the US Treasury Department stated in an additional statement: "These ships may not be able to cover the costs of the accidents they participated in, including causing significant environmental damage and safety risks, as well as related costs
Industry insiders have stated that shipowners will also weigh whether violating price cap sanctions may be severe. Energy expert Richard Bronze said that the market has noticed that the first sanctions implemented have focused on the Russian crude oil variety Novy Port and the Pacific variety ESPO Blend, which are usually more expensive than Russia's main export variety Urals. Even so, some analysts suggest that lifting the price ceiling may be the real way to punish Russia.
Adi Imsirovic, head of Surrey Clean Energy consulting firm, said that if G7 really wants to harm Russia, it should lift the price ceiling, make EU/UK sanctions effective, and impose secondary sanctions on companies and countries that purchase Russian oil. But he stated that this is highly unlikely because the price ceiling at least allows for the flow of Russian crude oil, thereby regulating international oil prices.
He said, "The US government has been hit hard by the rise in oil prices caused by the turmoil in Gaza, which may expand to conflicts in the Middle East. The last thing the government wants is a further increase in crude oil prices in the global market, leading to an increase in gasoline prices in the United States
Technical analysis of crude oil: Yesterday, crude oil initially declined and then rose, with the daily decline rebounding and closing at the positive K-line. After three consecutive positive days, the decline slightly stopped, accompanied by a rebound in the downward trend. The low point of the downward trend happened to be in the previous low point of 81.50-82.30, and the third downward trend still failed to break through. There is still support for the visible low point in the short term, and it continues to fluctuate widely around the 81.50-95.0 range. Currently, the daily trend has slightly stopped falling, but in the short term, it is expected to rebound. The 4-hour chart showed a downward trend and a rebound, with a stable start of the Bollinger Road lower track. Multiple tests showed that a supporting area was supported. The 4-hour chart temporarily shows the sawing oscillation rhythm within the interval. Long short duration is not strong. Rebound from the lower track to the vicinity of the middle track, and the short track is expected to rebound towards the upper track. Structurally inclined towards a rebound. The low point of 82.0 in the 1-hour chart started to stabilize and rebound, and a wave of rebound and closing high broke the continuation of the weak trend. Today's operation relies on the 82.0 low point to defend and see the rebound first, while the weekly line continues to compete for the middle track. In the short term, it is temporarily impossible to go out on one side and is treated with a volatile approach.
The upper short-term focus is on the front line resistance of 84.0-84.3,
Short term focus on 81.0-81.2 frontline support below.
