BBI INFO
1. Market review: On Monday, spot gold rose, and the U.S. market was boosted by an unexpected plunge in the monthly rate of durable goods orders in the United States. It once touched the 1820 mark, then fell back, and finally closed up 0.3% to 1817.28 US dollars per ounce. Spot silver It fluctuated at a low level, and finally closed down 0.69% at $20.64 an ounce.
2. U.S. durable goods data was unexpectedly lower than expected The monthly rate of U.S. durable goods orders in January recorded -4.5%, expected to be -4%, and the previous value was 5.1%, the largest drop since April 2020.
3. Federal Reserve Governor Jefferson said that the current inflation may be longer than imagined, but one cannot only focus on one data, and raising the inflation target of 2% may damage the credibility of the Federal Reserve.
4. The current Atlanta Fed GDPNow model has raised its forecast for the real GDP growth rate (seasonally adjusted annual rate) of the United States in the first quarter of 2023 to 2.8%, higher than the 2.7% on February 24.
MARKET VIEWPOINTS
CMC Market Analyst Tina Teng
The rebound is a technical callback, the key support is $1778
Gold finds a foothold above 1,800 amid a weaker dollar and a pullback in bond yields. Gold is down more than 7% from its February high of $1,959. The rebound could also be due to a technical pullback as it is already oversold with key support at the 200-day moving average at $1,778.
Adrian Ash, director of BullionVault
Inflation should be positive for precious metals prices, as gold is often used as a hedge against inflation. So far, though, it’s clear that inflation will only support gold prices if it slows. The bullish case for gold and silver in early 2023 has now faded on the back of stronger than expected inflation data.
Gold prices were supported in early February by market expectations that the Federal Reserve and other central banks would stop raising interest rates soon and start cutting them this year. But rising living costs have destroyed the chances of a reversal in central bank rates.
On the other hand, precious metals traders are still adjusting positions blindly due to the continuous delay of CFTC data. While long positions in gold have undoubtedly been cleared, bearish bets are likely to remain cautious due to the latest tensions surrounding Russia at the G20 meeting.
Suki cooper, precious metals analyst at Standard Chartered Bank
Gold’s downside momentum was fueled by expectations of further rate hikes by the Federal Reserve, which was further reinforced by concerns about sticky inflation. Gold is already close to oversold territory, but one of the three pillars that have driven gold prices higher since the beginning of the year has weakened, and the remaining two pillars are also worrying the market. First, the market prematurely priced in peak interest rates and a weaker dollar, with positioning data for gold showing that positions have been pared back as expectations for a near-term rate hike re-emerged. The remaining two are physical demand and central bank buying interest in gold. But the trend of the two also worries the market. Gold demand in China’s official sector may be slowing down. In January, the People’s Bank of China added 15 tons to its reserves, well below the 62 tons announced in November and December last year. Data from the Census and Statistics Department of the Hong Kong government also showed that China’s net gold imports through Hong Kong also fell by 47% in January to 23 tons. Meanwhile, physical demand in India is also weakening. India’s gold imports plunged 76% in January from a year earlier to 11 tonnes, the weakest since 2003, as local prices rose and import bills rose. In addition, the outflow of ETFs continues to put pressure on the gold market. As of February this year, the outflow of positions has reached 20 tons. At present, ETF positions in North America have stabilized, but those in Europe continue to decrease, and the macro environment does not seem to be able to support more stable positions. The next support level for gold is $1788. And we still think that most of the upside risks will be in the first half of the year, while gold will continue to face downside risks in the second half of the year.
Shaun Murison, Senior Market Analyst, IG
The short-term correction of gold price is coming to an end
At present, the 20-day moving average of gold crosses the 50-day moving average, indicating that the price of gold will continue to show a downward trend in the short to medium term. However, gold prices are still holding above the 200-day moving average, suggesting that the long-term trend for gold remains up, at least for now. Stochastic shows that the price has now entered oversold territory. On the whole, the price of gold is currently in a short-to-medium-term correction under the long-term trend, and the long-term upward trend still exists, while the oversold signal indicates that the short-to-medium-term adjustment may be coming to an end. At present, the price of gold has fallen below the 1820 support level, and the downward movement has formed a small falling wedge, which indicates that the momentum of the downward movement has slowed down and the price of gold may rebound. Traders who support the long-term uptrend may hope that gold prices can return to the upper wedge and the 1820 resistance level, and move out of the oversold area significantly before finding a new long entry point. In this case, 1845 and 1875 serve as initial upside resistance targets, while a close below the reversal low could be used as a stop loss setup on the trade.
