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[Zhishui Precious Metals Weekly report] negative US interest rates are expected to rise. Precious metals are expected to continue to rise next week.
May 17,2020 18:12CST
translation
Source:Han Kui
The content below was translated by Tencent automatically for reference.

SMM5 March 17:

Main points of investment:

Recent market expectations of the Fed's negative interest rate measures and the poor performance of economic data have led to precious metal prices breaking out of the consolidation range and opening up further. Precious metals are likely to accelerate in the short term.

What we need to be wary of is how likely it is to introduce negative interest rates. Judging from the current economic "arsenal" of the United States, there are still relatively sufficient measures to deal with the deterioration of the economy. I am afraid that after the expectation of negative interest rate speculation, investors need to do a good job in controlling the risk of their positions.

Operation suggestions:

Gold:

Medium-and long-term trading: pre-Jiancang more than 1700 orders continue to hold, those without positions wait and see, in the second half of the year more than 1850 began to invert pyramid empty orders.

Multi-day trading: 20% of Loco-London gold position 1730 low gain, 1715 stop loss, 1798 stop profit.

Silver:

Medium-and long-term trading: wait and see for the time being.

A few days of trading: Shanghai Bank of China 20% position near 4000 bargain, such as pullback to 3900 and then fill 10% position, depending on the specific situation stop loss, 4200 stop profit.

Spot trade transactions: domestic spot silver 4000 near and below to receive goods, 4200 near consider shipping half, can not get timely profits can lock positions in futures.

I. Review of the market

From May 11, 2020 to May 17, 2020, London Gold week opened at US $1702 / oz, closed at US $1743 / oz, peaked at US $1751 / oz and peaked at US $1691 / oz, up US $41 / oz, or 2.41%.

Chart 1: the trend of London gold

From May 11, 2020 to May 17, 2020, London Silver week opened at $15.521 / oz, closed at $16.610 / oz, peaked at $16.726 / oz and peaked at $15.281 / oz, up $1.129 / oz, or 7.29%.

Figure 2: the trend of London silver

II. Global Macroeconomy

1. Market expectations of negative US interest rates are rising

Futures contracts expiring in April and after 2021 still show that the market expects negative interest rates, according to the CME Group's FedWatch tool. The implied interest rate of the federal funds rate futures contract also shows that the benchmark policy rate will fall below zero by the second quarter of 2021. Before Powell spoke, the contract showed that interest rates were about half a basis point by the end of the first quarter of 2021.

Federal Reserve Chairman Colin Powell sent a clear message to interest rate futures traders on Wednesday: betting that the Fed will adopt a negative interest rate policy is very wrong. Powell said the committee's view on negative interest rates really hasn't changed. This is not what we are thinking about. Powell is the latest monetary policy maker to reject the idea of a negative interest rate policy. At least six of the 12 regional Fed chairmen have rejected the idea.

The actual monthly rate of retail sales in the United States in April was-16.40%, expected to be-12%, with a previous value of-8.4%. The monthly rate of core retail sales in the United States in April was actually announced at-17.20%, expected to be-8.5%, and the previous value was-4.2%. Data show that US retail sales fell at a monthly rate of 16.4 per cent in April, the biggest drop since records began in 1992.

CFTC position

Follow us next week.

Next week will focus on the minutes of the Fed meeting, Powell's speech and euro zone manufacturing PMI data.

Tuesday:

22:00, Federal Reserve Chairman Powell and US Treasury Secretary Nuchin will attend the Senate Finance Committee hearing by video to brief Congress on economic measures to deal with the new crown epidemic.

22:00 2020 FOMC vote Committee, Minneapolis Federal Reserve Chairman Kashkari delivered a speech on the economy.

Thursday:

02:00 the Federal Reserve released the minutes of its April monetary policy meeting.

Friday:

At 02:30, Federal Reserve Chairman Colin Powell delivered the opening speech at the "Fed listen" event, and Federal Reserve Governor Brainard will make a speech.

16:00 initial value of manufacturing PMI for May Markit in euro area.

V. Technical analysis

London gold weekly line chart closed with a basic bald barefoot Zhongyang line, the price broke the high of the previous week and reached a new high this year, the price is above MA5, MA60 and MA240 continue to extend upward to show a good medium-and long-term upward trend. RSI is in the normal range, the current rising space has been opened, after a small correction next week, it is more likely to continue to rise. The first pressure level is $1751 / oz above, the second pressure level is $1800 / oz, the first support level is $1722 / oz below, and the second support level is $1700 / oz.

The trend of London silver is roughly the same as gold, and it is more likely to continue to rise after a slight correction next week. The first pressure level above is US $17 / oz, the second pressure level is US $17.5 / oz, the first support level is US $16.0 / oz below, and the second support level is US $15.0 / oz.

Investment suggestion

Recent market expectations of the Fed's negative interest rate measures and the poor performance of economic data have led to precious metal prices breaking out of the consolidation range and opening up further. Precious metals are likely to accelerate in the short term.

What we need to be wary of is how likely it is to introduce negative interest rates. Judging from the current economic "arsenal" of the United States, there are still relatively sufficient measures to deal with the deterioration of the economy. I am afraid that after the expectation of negative interest rate speculation, investors need to do a good job in controlling the risk of their positions.

Gold:

Medium-and long-term trading: pre-Jiancang more than 1700 orders continue to hold, those without positions wait and see, in the second half of the year more than 1850 began to invert pyramid empty orders.

Multi-day trading: 20% of Loco-London gold position 1730 low gain, 1715 stop loss, 1798 stop profit.

Silver:

Medium-and long-term trading: wait and see for the time being.

A few days of trading: Shanghai Bank of China 20% position near 4000 bargain, such as pullback to 3900 and then fill 10% position, depending on the specific situation stop loss, 4200 stop profit.

Spot trade transactions: domestic spot silver 4000 near and below to receive goods, 4200 near consider shipping half, can not get timely profits can lock positions in futures.

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