International spot gold was trading at $1,556.40 an ounce in early Asian trading on Thursday. Last trading day the gold price all the way to start the shock rebound trend, at the beginning of this week two consecutive trading days after the rebound closed up, now continue to maintain the shock upward trend.
Gold T+D rose 2.44 yuan, or 0.71%, to 344.94 yuan per gram on Wednesday, with the highest bid of 345.75 yuan per gram and the lowest bid of 342.35 yuan per gram.
International spot gold, meanwhile, rose $9.92, or 0.64 percent, to $1558.00 an ounce at $1556.03.
Despite the formal signing of the first phase of the trade agreement, investors still have some concerns about the future of trade. With most of the details already known to the market, investors expect some hurdles in the second phase of the signing process. Meanwhile, the situation in the Middle East remains a “time bomb”, the market is still skating on thin ice and buying gold as a safe haven is not surprising. Meanwhile, unexpected news from Russian politics overnight briefly raised the risk aversion of the market, with prime minister Dmitry Medvedev announcing the resignation of the entire Russian government and President Vladimir Putin signing the resignation of the government, which briefly caught investors off guard. Gold under the combined force of multiple factors to maintain strong resilience, still maintain the momentum of the rebound shock.
Us stocks gave up most of their gains after a rally on news of a first-phase trade deal between the US and China. The market has already digested the news ahead of time and there are worries about the future.
Meanwhile, gold maintained its strong rally, peaking at $1558.05 an ounce in New York.
Sumitomo Mitsui said gold rose instead of falling as the us-china trade agreement was formally signed because it was already priced in the market.
Edward Moya, the senior market analyst at OANDA in New York, said people expect trade concerns to remain because “we’re not going to see a complete elimination of tariffs.” The risk will support gold in the short term, which could rise to $1,580 in the coming weeks, but should stay at $1,540 for now.
“The market is still uncertain about a deal between China and the United States, while the weakness of stocks and the U.S. dollar have also supported gold prices,” said Commerzbank analyst Eugen Weinberg. “The fact that tariffs will not be lowered further until after the U.S. elections in November will not help to reassure the markets.”
The focus will then shift to the second phase of the economic and trade agreement, which U.S. Treasury Secretary Steven Munchin said is likely to focus on technology and cybersecurity, which has long been a sticking point between the two major economies.
At 21:30 Beijing time on Thursday (January 16), the US will release the monthly retail sales rate for December, known as the “scary data”. Expectations were 0.3 percent, up from 0.2 percent, indicating confidence in the December retail season.
Recent U.S. CPI and PPI data for December fell short of expectations, and retail sales data could further understate low inflation.
Brady said the fed will not raise interest rates for 10 years to avoid negative rates, as inflation has failed to pick up after three consecutive fed rate cuts in 2019.
Both Dallas fed President Robert Kaplan and Philadelphia fed President Richard Harker were more optimistic about the outlook for inflation on Wednesday, saying it could exceed 2 percent for some time. Fed governor Paul Bowman will also make a speech today, and investors should watch for comments on inflation.
If U.S. retail sales data are better than expected, the dollar will get a boost and gold will suffer. On the other hand, if the data falls short of expectations, the dollar will face more downward pressure and gold will get a boost and rebound further.
On a technical note, the daily chart shows a slight recovery from the low, but the MACD red momentum column has narrowed slightly, and the KDJ stochastic continues to move lower, indicating that gold’s pullback momentum is still there and another dip is still possible.
As shown in the 4-hour chart, the gold price staged a mild rebound, with the MACD red momentum column expanding slightly and the KDJ random index rising modestly, indicating that gold may initially rebound moderately in the short term.
Fundamental negative factors:
Liu He, a member of the political bureau of the communist party of China central committee, vice-premier of the state council and Chinese leader of the comprehensive economic dialogue between China and the United States, and US President Donald Trump officially signed the first stage of china-us economic and trade agreement. U.S. Treasury Secretary Steven Munchin said the trade deal would boost economic growth by 50 to 75 basis points.
The U.S. consumer price index (CPI), released on Tuesday, rose at a 2.3% annual rate in December, the highest since October 2018, up 2.1% from a year earlier but below expectations of 2.4%. Us consumer prices rose slightly in December and underlying monthly inflation pressures eased, agency comments said.
- The US Treasury Department released its semi-annual report on its currency policy on Monday (January 13), lifting its designation of China as a “currency manipulator”. The report also said continued dollar strength was “worrisome” on the basis that the IMF judged the dollar to be “overvalued” on a basis of real efficiency.
White House national security adviser Robert O ‘Brien told Axios on Monday that Washington wants to get talks with Pyongyang “back on track” and implement north Korean leader Kim Jong-un’s “commitment” to the denuclearization of the Korean peninsula.
Fundamentals favorable factors:
Nancy Pelosi, the speaker of the US house of representatives, has signed the latest articles of impeachment against Donald Trump. Articles of impeachment are expected to be “escorted” to the Senate by seven house impeachment managers.
The U.S. producer price index, released on Wednesday, rose to an annual rate of 1.3 percent in December, up from 1.1 percent but below expectations.
- According to the New York times, U.S. forces have resumed joint operations with Iraq, despite the Iraqi parliament’s vote in favor of a U.S. withdrawal.
Russian President Vladimir Putin has signed the government’s resignation. Russian President Vladimir Putin has nominated federal tax chief Mishustin as prime minister, according to the Interfax news agency.