Analysis of gold news: This week, gold prices maintained a high consolidation posture and failed to maintain above $2000. This week, they fell nearly $10. Some analysts pointed out that gold prices did not convincingly break through $2000, which sparked some cautious sentiment in the market. Some analysts said that gold may need to consolidate in the short term before reaching historical highs. Although analysts do not intend to short gold in the current environment, some say that the trend of gold prices is disappointing as gold has not benefited from a significant decline in yields and a weakening US dollar. At present, gold prices have closed at 1992 US dollars, ending three consecutive weeks of upward trend. This week's close is basically the same as last Friday. However, compared to the opening gap at the beginning of this week, prices have fallen by nearly 1%. Commodity analysts say that gold prices continue to be driven by global geopolitical factors, as the retreat of market panic weakens gold's safe haven appeal. Although the war between Israel and Hamas continues, the conflict is still limited to the Gaza Strip, bringing the ongoing chaos in the Middle East under control.
Although geopolitical events can provide tradable momentum for the gold market, they do not help attract long-term investors. The rise of gold based on specific geopolitical factors needs to see events escalating to maintain its safe haven buying. Due to the limited economic data to be released next week, investors will continue to digest the Federal Reserve's monetary policy decisions. Although the Federal Reserve has maintained interest rates unchanged for the second consecutive time in this tightening cycle, Federal Reserve Chairman Powell still maintains his tightening tendency. Is the restrictive nature of monetary policy sufficient to reduce inflation to 2%? The Federal Reserve has opened the door for another rate hike. Although we believe that interest rates have peaked, market participants may still remain cautious in this regard. Assuming the situation in the Middle East does not escalate further, the upward potential of gold prices may be severely limited. Powell will participate in a panel discussion on "Currency Challenges in the Global Economy" in Washington, D.C., where the market will have the opportunity to hear more of his speeches.
Commodity analysts say that gold prices continue to be driven by global geopolitical factors, as the retreat of market panic weakens gold's safe haven appeal. Although the war between Israel and Hamas continues, the conflict is still limited to the Gaza Strip, bringing the ongoing chaos in the Middle East under control.
The geopolitical crisis driving up gold prices is running out, "said Christopher Vecchio.
Vecchio stated that although geopolitical events can provide tradable momentum for the gold market, they do not help attract long-term investors. He pointed out that the rise of gold based on specific geopolitics needs to see events escalating to maintain its safe haven buying.
Vecchio stated that he withdrew from his gold position last week and will continue to wait and see in the near future as he expects gold prices to consolidate.
Most of the significant volatility in gold has ended. But I don't want to short gold because the basic background of a weaker US dollar and a decline in bond yields is favorable for gold, "he said." I think gold prices can continue to rise, but for potential traders, this will be a frustrating battle
David Morrison, senior market analyst at Trade Nation, said that the gold market is looking for new catalysts.
Ole Hansen, head of commodity strategy at Shengbao Bank, stated that he has a neutral attitude towards gold. He also pointed out that consolidation around the current level will be healthy. Prior to this, gold prices rose nearly 7% in October, which was the best monthly performance since March this year.
After a surge of nearly $200 last month, gold's rally has temporarily stopped, with profit taking once again above $2000 per ounce. With such a strong rebound in the short term, the market needs to consolidate, but so far, the adjustment has been relatively small, with support at $1953, higher than $1933, which is the 38.2% retracement of the 200 day moving average and the aforementioned rebound
On the downside, Hansen stated that gold prices must fall back to $1900 per ounce in order to put this new upward trend at risk.
Focus on Powell this week
Due to the limited economic data to be released this week, analysts say investors will continue to digest the Federal Reserve's monetary policy decisions.
Although the Federal Reserve has maintained interest rates unchanged for the second consecutive time in this tightening cycle, Federal Reserve Chairman Powell still maintains his tightening tendency.
Is the restrictive nature of monetary policy sufficient to reduce inflation to 2%? That's the question we ask ourselves, "Powell said at a press conference after the monetary policy decision.
Barbara Lambrecht, commodities analyst at Commerzbank in Germany, said: "The Federal Reserve has opened the door to another rate hike. Although we believe interest rates have peaked, market participants may still remain cautious in this regard. Assuming the situation in the Middle East does not further escalate, the upward potential of gold prices may be severely limited
Powell will participate in a panel discussion on "Currency Challenges in the Global Economy" in Washington, D.C., where the market will have the opportunity to hear more of his speeches.
The only important economic report to be released this week will be the initial consumer confidence survey by the University of Michigan.
Last month's revision of the survey results surprised the market, with one-year consumer inflation expectations rising by 4.2%. Powell refuted this data at a press conference, stating that it is an outlier, and most consumer surveys show that inflation expectations are still "stable".
Technical analysis of gold: Based on the overall technical analysis of this week, the market for gold is mainly characterized by inter district fluctuations, and the weekly trend ultimately charges a long shadow negative line. Combined with the current major cycle and the US dollar index, the strong resistance exhibited by the current weekly trend is temporarily around the highest point of this week from 2004 to 2007, while further resistance above is still near the 2010 level, while support below is temporarily around the low point of this week, The primary support is temporarily around 1978-1980 below. Therefore, in short-term trading next week, we can still consider trading in both long and short positions to focus on volatile trading. Yesterday, due to the non agricultural roller coaster market, gold rose from around 1985 to near the 2004 trend line above and began to decline. The overall daily trend closed longer than the positive line, so next week, we will operate on the single daily line. Gold mainly tends to be bullish, but considering the current market news situation, We cannot be completely bearish, so for the time being, short-term trading on Monday will mainly focus on high-altitude, low-range trading. If the market falls below the bottom and mainly reaches around 1978-1880, then it will still reach a lower point near the 1970-1972 level.
From the daily chart, it can be seen that the daily line closed positive on Friday, forming a downward trend of three methods at the top, which means that the short term is running short, but the price still runs above the middle track of the Bollinger band. The KDJ indicator shows an upward turn at the bottom, while the MACD indicator shows a downward trend with a high gold cross and a moderate shrinkage in the red column. The short term is running empty. From the 4-hour chart, the iconic bullish line appears, while the high point is declining and the low point is at a new low. The bearish trend has officially formed. From the indicator perspective, the short-term oversold, the KDJ indicator turns high and runs downward, while the MACD indicator continues to increase volume in the middle of the golden cross and red bar. The short-term will rebound and continue to be mainly bearish after the rebound. From the 1-hour chart, it can be seen that the Bollinger belt is flat, with prices running between the upper and middle tracks of the Bollinger belt. The indicator KDJ is moving downwards, the MACD indicator is stuck at a high level, and there is a demand for withdrawal in the short term.
Focus on the top line of resistance from 2004 to 2006,
Follow the 1972-1970 frontline support below.
Last Friday (November 3rd), US crude oil rebounded slightly and rose; On the second day after the Federal Reserve kept its benchmark interest rate unchanged, risk appetite returned to the financial markets, and oil prices rose by over $2 per barrel, breaking the three-day downward trend. US policymakers struggled during this week's two-day policy meeting to determine whether the financial situation is already tense enough to control inflation, or whether the economy, which continues to exceed expectations, may require more restraint. Finally, the Federal Reserve held its benchmark interest rate unchanged at 5.25% -5.50% on Wednesday. Oil investors have been closely monitoring the Federal Reserve's policy decisions, fearing that a significant interest rate hike may slow down the economy and weaken energy demand. Analysts say that "if the Federal Reserve calls a halt, oil prices should be very close to bottoming out." Although the increase in crude oil production is lower than expected, as crude oil usage continues to fall below demand, US crude oil reserves are still increasing, eliminating the energy market's claim of a serious shortage of crude oil pipeline supply. Investors should also continue to pay attention to the developments in the Middle East, as broader conflicts may disrupt supply in the region, leading to nervousness in the oil market.
Oil prices have fallen for the second consecutive week due to supply concerns caused by conflicts in the main producing region of the Middle East, as well as concerns about the demand prospects of China, the world's largest crude oil importer. On Friday, oil prices fell by more than 2%. In the session, WTI crude oil fell below $80 per barrel for the first time since August 29th. Meanwhile, employment data has raised expectations that the Federal Reserve may raise interest rates in the largest oil consuming economy.
John Kilduff, a partner at Again Capital LLC in New York, said, "The market is taking this conflict calmly because it appears to be neither a major demand interruption nor a supply interruption event
IG market strategist Yeap Jun Rong said, "There are still some reservations about the outlook for oil demand this week, as China's PMI has not given too much confidence in demand recovery
Federal Reserve Chairman Jerome Powell stated at the post meeting briefing that the Fed still has a long way to go before inflation reaches its 2% target. But he also pointed out that the financial situation has significantly tightened this year and listed more risks facing the economy. These comments led to a sharp contraction in the yield of US treasury bond bonds and pushed the US dollar down sharply, because traders expected that it was less likely to raise interest rates again in December.
The weakening of the US dollar is beneficial for commodities priced in US dollars, including oil, as it makes commodities cheaper for international buyers. The crude oil market experienced a difficult October, partly due to concerns that stronger than expected economic data will lead to the Federal Reserve maintaining higher interest rates for a longer period of time, which may put pressure on global economic growth and suppress oil demand from China, the world's largest consumer.
Official data shows that the slowdown in employment growth in the United States in October exceeded expectations, while wage inflation has cooled, indicating a easing of labor market conditions. This data supports the view that the Federal Reserve does not need to further raise interest rates. If the United States continues to reveal that its economy is weakening and the cumulative effects of monetary policy are just beginning to show, then oil prices may face further decline as the world's largest consumer country's demand for energy will decline. The Federal Reserve has maintained stable interest rates this week, while the Bank of England has kept rates at their highest level in 15 years, supporting oil prices as some risk appetite returns to the market.
At the same time, political concerns remain the focus, and the United States is exploring a series of measures to suspend the conflict between Israel and Hamas to help people safely evacuate Gaza and allow humanitarian aid to enter. Meanwhile, the US House of Representatives has passed a bill aimed at expanding oil sanctions against Iran. According to the Capitol Hill newspaper, the US House of Representatives passed a bill with a vote of 342-69 on the same day, aimed at promoting punishment for entities involved in Iran's oil trade.
On the supply side, according to analysts' expectations, Saudi Arabia, the largest oil exporter, is expected to reconfirm its voluntary production reduction of 1 million barrels per day until December. Energy services company Baker Hughes said on Friday that the US energy company will reduce the number of oil and gas drilling platforms it operates this week to its lowest level since February 2022.
According to the Intercontinental Exchange (ICE), the speculative net long position of Brent crude oil futures decreased by 16413 contracts to 200283 contracts last week.
Overall, crude oil and finished oil transactions were sideways in October. Economists from Rabobank analyzed the prospects of Brent crude oil, Brent crude oil prices will hit $100 at some point in the fourth quarter of 2023 or the first quarter of 2024, but not at an average level. If gasoline demand continues to weaken, this will be a signal of deteriorating economic prospects, triggering a financial sell-off in Brent crude oil and WTI prices. However, the long-term natural outlook and ongoing political issues will alleviate this situation. If macro concerns continue to suppress prices, we may see Brent The price of special crude oil has dropped to a low of $80. We still believe that Brent crude oil prices will hit $100 per barrel at some point in the fourth quarter of 2023 or the first quarter of 2024, but not at an average level
Technical analysis of crude oil; Yesterday, crude oil rebounded from a downward trend and closed positive. After a continuous negative day, the daily trend turned positive and recovered. The short-term trend also follows a step by step downward trend, without a unilateral extremely weak downward trend. It reached a low point and then regained its higher position. It makes sense to have a lot of time and space, maintaining a sawing and oscillating walking style as a whole. The daily downward trend rebounded and turned positive, pulling back the oscillation. The 4-hour chart is accompanied by a second downward trend and a rebound, with the bottom track of Bollinger Road stabilizing and recovering from the middle track. It is not a very weak downward trend, and the bottom track is closing with short circuitous twists and turns. The weak market should be under pressure and closed lower after rebounding in the late trading last night, so that after correction, it can further weaken and decline today. However, the late trading rebound closed at a high level, making the K-line structure a bit more stable and showing signs of recovery. The continuity of long and short is uncertain. Structurally, it is on a downward step, while the K-line is on a downward trend, rebounding and stabilizing, and the bullish and bearish enter differentiation. There are many reasons, and there are reasons for emptiness. The short-term probability is presented in the form of oscillating saws.
The upper short-term focus is on the front line resistance of 82.6-82.8,
Stay tuned for frontline support from 79.3 to 79.6 in the short term below.
