On Tuesday (November 14th), after the data was released, the US dollar index fell in the short term. In addition, gold prices have also rapidly risen, approaching $1970 per ounce at one point, reaching an intraday high of $1970.85 per ounce. The release of Consumer Price Index (CPI) data has triggered fluctuations in the financial market. After the data was released, the US dollar index fell in the short term, while non US currencies collectively rose. In addition, the price of gold has also risen. Although investors had previously mainly bet that the Federal Reserve would not raise interest rates in December, inflation remained significantly higher than the Fed's 2% target. However, with the release of CPI data, investors' views on the Federal Reserve have changed. Federal Reserve Chairman Powell said at a meeting earlier this month, "I believe the slowdown has made us more aware of how much more we need to do if we need to take more action." This indicates that the Federal Reserve may take more measures to control inflation.
Institutional review of US CPI data: Housing inflation continues to rise, offsetting the decline in energy inflation in October. Institutional review of US CPI data: Ironically, the more financial markets rise due to hopes that the Federal Reserve will complete interest rate hikes, the more the market will undermine the Federal Reserve's efforts to slow down economic growth and lower inflation. Institutional review of US CPI data: The core CPI annual rate has recorded its lowest since September 2021, indicating that although there is still some distance from the Federal Reserve's target, at least some gradual progress has been made. The 4% year-on-year increase in core inflation is the smallest increase since September 2021. We are still some way from the Fed's goals, but at least we have made some gradual progress. Institutional review of US CPI data: Last month, housing categories still brought upward pressure, but the pace of growth has slowed down. Although economists expect growth in this category to continue to slow down, there is also a risk of another warming up starting next year. Rent has a lag period of approximately one year in CPI, which means that the recent accelerated increase in rent will not be reflected in the data until a long time.
On Tuesday (November 14th), a market strategist stated that the US economy is on the brink of a severe debt spiral, which will drive gold prices significantly higher in the coming quarters.
Jess Felder, the author of the Felder Report, recently stated that the Federal Reserve urgently wants to ensure that financial markets maintain confidence in their ability to cope with uncertain economic conditions. However, he added that in a desperate situation of maintaining high interest rates in a world plagued by sovereign debt, the Federal Reserve is on the brink of making major policy mistakes.
Feld said: "The Federal Reserve has always said that interest rates must remain high for a longer period of time, but as a result, we are beginning to see problems in the treasury bond bond market." "We will see more signs of financial instability, and the volatility of treasury bond will increase."
Due to increased debt and rising interest rates, the US government paid $879.3 billion in interest for the fiscal year ended September 30th. The service cost for the new fiscal year is expected to increase to $1 trillion. The cost of debt in the United States has exceeded the country's annual defense budget.
Growing US debt concerns have affected the US treasury bond bond market. Last week, the US government sold US $24 billion of 30-year treasury bond bonds, and the auction result was disappointing. Analysts pointed out that during the auction period, primary traders who purchase supplies that investors have not purchased must accept 24.7% of the debt provided, which is more than twice the average of 12% last year.
Feld added that in this environment, there is indeed a risk of the bond market deviating from economic conditions. He said that this could also push the stock market back into the bear market region and potentially push the economy into recession, forcing the Federal Reserve to intervene and limiting bond yields.
"As the volatility of the treasury bond bond market intensifies, the Federal Reserve will have to intervene. They will say that they will not end the balance sheet reduction, but they will launch a new plan to help stabilize the market," he said. The market will see through this and see it as a new round of quantitative easing, and then gold prices will explode
Feld added that when the unemployment rate in the United States begins to rise and as concerns about economic recession intensify, bond yields will rise instead of fall, the conditions for gold are ripe.
He pointed out that it is inevitable for yields to continue to rise, as the US government has no conditions to provide any financial support when the economy eventually enters a recession.
"The size of the US debt and the rising deficit will make this recession different from other recessions. Any action taken by the government will only expand the liquidity gap in the treasury bond market. This is the beginning of the debt spiral," he said. In the coming quarters, investors will realize that this fiscal issue will not disappear and will eventually turn to gold
As for how high gold prices will rise in the new round of rise triggered by the debt spiral. Feld said he expects gold prices to rise to $2700 per ounce.
He said, "The three-year horizontal correction of gold prices is a very classic bullish flag shape. When looking at the previous flagpole, namely the rise in 2018 and 2019, the simple prediction of classical technical analysis highlights that the target price is about $700 higher than the current price
Technical analysis of gold: Gold continued to fluctuate around 1945 during the day, and the market was waiting for the CPI data to be released in the evening. With the positive CPI data, gold also directly broke through the above 1960-70 level. Our data also successfully predicted the target of this wave of bulls, but we did not predict that gold would continue to break through 1960 and reach the above 1968 1970 level again, With the continuous strength of this wave of bulls, the subsequent high level further suppression has once again reached the upper 1980-82 level, which is also the key suppression point of this wave of bulls in the short term. If the market continues to break through the 1980 level in the next few days, then we will see the breakthrough situation of the upper 2000 level again in the future!
From a 4-hour cycle, after a slow decline last Friday, the gold market closed low with a cross star, followed by a positive line, with the k line dancing like a dancer on the Bollinger lower track. This is a clear signal of the mid-term strength of the gold market, like a prelude to the band waiting, heralding the upcoming climax. Therefore, our focus should be on the trend point of the 4-hour cycle around 1953, the strength point around 1970, and the target point of a surge around 2000.
From today's daily trend, it is expected that the close of the day will continue to be positive for two consecutive days, indicating that the bullish trend in gold has also awakened again. However, due to the fact that the momentum of today's bullish trend has almost ended, and there is a new round of suppression on the 1970 72 short line above, we will not consider continuing to pursue bullish positions tonight. If there are no orders in the position, we can consider finding opportunities to intervene in short orders and see a wave of pullback, After all, the area near the 1970 level is also the dividing line for the continuous decline of the previous market. Therefore, in the short term, it is expected that there will be some rebound near the suppression of the 1970 level. However, we can temporarily look at the support of the 1958 1960 level below. If the market falls below 1958 again in the later half of the night, we can further look at the previous 1950 1953 level!
The upper short-term focus is on the resistance on the 1983-1980 front line, while the lower short-term focus is on the support on the 1950-1954 front line,
On Tuesday (November 14th), crude oil prices were trading near $78.30 per barrel in the US market. After three consecutive weeks of decline, crude oil prices rebounded, and traders are waiting for this week's industry report to confirm whether the recent decline is excessive. Goldman Sachs analysts said that the resurgence of demand concerns has driven the sell-off, but consumption remains strong throughout the year and may continue to maintain this momentum in 2024. Goldman Sachs also lowered its price forecast for next year to $92 per barrel. The OPEC monthly report states that overly exaggerated negative sentiment "has led to lower prices, but recent data shows healthy fundamentals and strong global economic growth. The IEA will release its report on Tuesday, and two more EIA inventory data will be released later this week. Crude oil has resumed its defensive position this week, but so far, both the oil distribution and WTI crude have remained above key support levels, which may indicate that the worst stage of long-term liquidation has passed. Oil prices rose by over 1% on Monday, after OPEC's monthly market report eased concerns about weakened demand, and the US investigation into suspected violations of Russian oil sanctions raised concerns about potential supply disruptions. The OPEC monthly oil market report seems to have overturned concerns about demand, mentioning excessive negative sentiment surrounding demand from major Asian countries, while raising demand growth forecasts for this year and maintaining the same demand growth expectations for next year. Chen Jinhao believes that oil prices may have bottomed out after falling by about 4% last week and recording their first consecutive three weeks of decline since May. Given the weakening oil prices in the past few weeks, Saudi Arabia and Russia may continue to voluntarily reduce supply next year. Therefore, this should limit the downward potential.
Technical analysis of crude oil: Yesterday, crude oil rebounded and closed higher, with a daily closing of a small positive line, forming a double consecutive positive rebound. Combined with last Friday's cross K-line, the daily line slightly stabilized and rebounded higher, stabilizing support around 75.0 in a short period of continuous consolidation. In addition, it failed to break below the low point for two consecutive trading days, making the short-term weakness unable to continue, but presenting a rhythm of seesaw oscillation. The 4-hour chart held onto the track and saw a continuous positive rise, breaking through the small resistance point of 77.7 steps, forming a rebound and upward trend in a small cycle. At present, the 4-hour chart structure is leaning towards further rebound, relying on China Railway as the support point to be bullish first. Looking at how to convert in the future, it is currently a rebound correction in the downward trend. Combining space and structure to determine whether the aftermarket will be reversed or revised. The direction will change with changes in space and form.
The upper short-term focus is on the 80.3-80.0 front line resistance, while the lower short-term focus is on the 77.0-76.8 front line support.
