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Weekly Summary (06/12/2021)

Gold prices fell and the US dollar may put further pressure

Spot gold closed with lower for three consecutive weeks which reaching 1760. The price rose slightly late last week and finally closed at 1784. At present, there are two main factors affecting the price of gold. First, the US dollar has entered the interest rate hike cycle because the Federal Reserve has successively released the information of relatively tough monetary policy. It is generally believed that the Federal Reserve may increase the speed and intensity of interest rate hike early, so as to make the market enter the expected area of interest rate hike and then make some US dollars return and push up the US dollar index, affecting the trend of US stocks and commodities and may further depress the price of gold. Second, the new variant virus. After the emergence of new strains in South Africa, many countries have reported new cases and tightened entry control policies which has brought new uncertainty to the global economy. For the gold price, it is purely good to avoid risks but also depends on the follow-up market performance.

So far, five states in the United States have found patients infected with new mutant strains. President Biden announced his new strategy for the virus last week. With the arrival of the cold climate the mutant strains may set off a new round of infection and bring other problems.

US Treasury Secretary Yellen said that the mutant strain may lead to a serious economic slowdown at the beginning of the year which become a new uncertain factor and slow down the global economy.

In Friday's non-farm report, US non-farm jobs increased by 210000 in November which less than the expected 550000. Meanwhile, the unemployment rate in the United States decreased by 0.4 percentage points to 4.2% in November, the lowest level since the beginning of last year and returned to the level before the epidemic.

Generally speaking, it is still too early to assert the direction of the Fed's policy based on the epidemic situation and employment situation. The tightening of the Fed's monetary policy is the basic trend. If the economy is really greatly affected by the mutant virus in January next year, it may delay the interest rate increase plan but it is still impossible to make an accurate judgment.

The price may still be low this week with the upper range of 1780-1800 and the lower range of 1740-1780. In the short term, the opportunity of upward trend can be considered. It mainly focuses on the spread of mutant strains and the degree of changes in countries' entry policies. Focus on the downward trend.

Technical analysis:

Last week the price was relatively smooth and there was no obvious fluctuation in the brin belt range, but it was winding because the upward correction at the end of the week expanded the exposure of the brin belt, and the price was in the upper range of the channel and closed in an upward form. The market opening on Monday should pay attention to the changes of prices in the brin belt channel and respond quickly.

MACD kinetic energy basically indicates that the market is in the downward range and the speed line is more below the zero axis. After the golden fork is formed at the end of the week, the price rises and both kinetic energy and double lines cross the zero axis. It should be noted that the change of kinetic energy line after opening in Monday.

Important information this week:

Tuesday: 21:30 US October trade account (US $100 million)

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