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Weekly Summary (01/11/2021)

Gold faced new pressure as prices fell at the end of last week

In the first half of last week, the gold price maintained a volatile pattern with prices fluctuating up and down in the 1780-1810 range. There was a downward trend on Friday which was reaching the lowest position of 1772 then rebounded slightly in the late trading, finally closed at 1782. The main reason for the decline was that the Fed's expectation of reducing bond purchase next week gradually warmed up and the expectation of rising interest rates gradually deepened with the arrival of the end of the year, forming the pressure on gold.

This week the Federal Reserve's interest rate resolution in November will come which will have a great impact on the price trend of gold, silver, crude oil, and other commodities. In addition to the interest rate resolution announced at 2 a.m. on the 4th, we also need to pay attention to the speech of the chairman of the federal reserve after the interest rate resolution.

In his speech last Friday, Powell basically determined that the Fed's tendency to buy bonds has become a fact. Because of concerns about continued inflation are clear that it will reduce the certainty of bond purchase. He also pointed out that although it is time to reduce debt purchase, it too early to raise interest rates. At present, the job market has not returned to the ideal state, but he also believes that with the gradual decline of the epidemic, high inflation will gradually decrease in the next year.

As inflation has reached a certain level, the market's expectation of rising interest rates is gradually heating up. Although Powell stressed that it was too early to raise interest rates, it still could not reduce the heat of market expectations. Gold trading products are very sensitive to changes in interest rates which is expected to form a new round of pressure on gold prices. At the announcement meeting of the interest rate resolution on the 4th, if the interest rate remains unchanged it may trigger a new round of gold rise. An important variable is increasing dissatisfaction with Powell in both parties in Congress, mainly because he is ineffective in regulating the economy. This dissatisfaction and resistance may force him to carry out the policy of raising interest rates early.

The US GDP performance in the third quarter released last week was far from expected which also showed that there was still a long way to recover the US economy under the epidemic, and supported the gold price., With the further expansion of the epidemic, the U.S. economy grew at the slowest rate in more than a year in the third quarter, further aggravating the tension of the global supply chain, resulting in a shortage of cars and other commodities and almost curbing consumer spending. In the epidemic, the lack of relief funds and supply chain also brings great pressure to the economy.

This week, we will mainly observe the impact of the US interest rate resolution. In view of the high possibility of maintaining the interest rate unchanged, we will greatly eliminate the market's concern about this expectation, remove the obstacles to price rise, and trigger a new round of rising.

Technical analysis:

The price channel drawn by the brin belt channel this week is very uneven. When the medium-term price is in the consolidation stage the track line is relatively stable and the price has not changed greatly. The tail price is affected by market expectations and the upper and lower tracks of brin are wide, forming a downward trend. The subsequent callback did not form a change in the track line and the exposure contracted at the close.

MACD price curve is more accurate. From the middle of last week, the kinetic energy line basically remained below the zero axis, and the speed line moved down, forming a short-term deviation. At present, the double line crosses at the bottom which is an upward trend.


Important information this week:

Wednesday: 20:15 US ADP employment in October (10000)

Thursday: 02:00 the Federal Reserve announced its interest rate decision.

20: 30 initial jobless claims in the United States for the week ended October 30 (10000)

Friday: 20:30 after the quarterly adjustment of non-farm payrolls in October (10000)

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