Spot gold continued its decline in intraday trading in Europe, trading below the $1730 / oz mark. This is mainly due to a stronger dollar and higher yields on 10-year Treasuries, weakening demand for safe-haven gold. There will be US inflation data in the evening market, and investors need to keep a close eye on it.
On Tuesday, spot gold opened at $1732.22 / oz. As of press time, spot gold temporarily recorded $1727.80 / oz, down 0.29%.
[spot gold] gold fell for the second day in a row and is now trading around $1730. After the issuance of US Treasuries, bond yields rose, suppressing the price of gold.
The dollar index fell slightly during the day. So far, 22% of Americans have been vaccinated. In the short term, traders are waiting for upcoming US inflation and retail sales data to further orient themselves. The euro fell first and then rose against the dollar during the day, rebounding after hitting a low of 1.1871, breaking through the 1.19 mark. The pound is up 30 points against the dollar. Shops in England reopened after a three-month blockade. However, analysts warned that the UK's lead in the vaccine race to boost sterling could be short-lived as other countries catch up.
[crude oil] US oil rose first and then fell during the day, hitting as high as $60.74 per ounce. Positive factors: Rosengren, chairman of the Boston Fed, said the US economy could rebound sharply this year, while geopolitical tensions also boosted oil prices.
The Federal Reserve will start talking about reducing QE when the vaccination rate reaches 75%.
St. Louis Fed chairman Brad said Monday that the Fed may start talking about reducing QE when the vaccination rate in the United States reaches 75%.
According to zero hedging, if at the current vaccination rate, all other conditions are the same, 75% of the vaccination target could be reached in just two months, that is, sometime in June.
Bloomberg extrapolated the time a little later, and its statistics said that at the current vaccination rate, the time for the United States to reach 75% of the vaccination rate would probably fall in August.
As Bloomberg commentator Ye Xie wrote: "at the current vaccination rate, the 75% threshold can be reached in early August, that is, before the Fed's Jackson Hole global central bank meeting (Jackson Hole Symposium), which is often seen as an opportunity for the central bank to release major policies."
So assuming the Fed gives the market a few months to prepare, the actual contraction could begin early next year. The time frame is largely in line with the Fed's median forecast of major dealers, although market pricing shows a more aggressive timetable. Ye Xie said,
"from a liquidity perspective, this summer could be a challenging time for the market."
As we all know, the last "tapering panic" (2013) caused a huge shock in global markets. what exactly does the Fed's QE reduction mean for all kinds of assets?
In its latest analysis, (ING Group), the Dutch international group, reviews the huge shock in global markets after the Fed began to discuss reducing bond purchases. Strikingly, gold was the biggest loser, falling nearly 20 per cent between may 1 and September 5, followed by emerging market currencies.
In the evening, watching the US March CPI data is expected to have a certain impact on the market trend.
The US Consumer Price Index ((CPI)) data for March will be released at 20: 30 on Tuesday, April 13, domestic time. Us inflation data will have an impact on the direction of US bond yields, thus providing guidance for the dollar index and gold.
Media surveys show that unseasonally adjusted CPI in the US is expected to grow at an annual rate of 2.5 per cent in March, up from 1.7 per cent last month. The unseasonally adjusted core CPI rate in the US in March is expected to rise 1.5 per cent, up from 1.3 per cent last month.
The US producer price index (PPI) released on Friday was unexpectedly strong. The us PPI rose at a monthly rate of 1 per cent in march, an annualised rate of 4.2 per cent, the highest level since September 2011. Analysts point out that this will increase the upside risk of CPI.
Stronger-than-expected CPI data could trigger another rise in US bond yields. If so, this will not be conducive to the trend of gold prices.
From a technical point of view, gold has fallen below the key support around $1730 an ounce, Mehta said. The current $1721 / oz may support the gold price, and if it loses that level, it could cause the gold price to fall to $1716 / oz.
Mehta noted that gold's return to above $1730 an ounce is crucial to regain upward momentum. The bulls then need to overcome the resistance level around $1735 / oz, and from a higher point of view, $1742 / oz and $1745 / oz may constitute solid resistance.
"if the inflation data do pick up this week, it could be a catalyst for higher Treasury yields, which is bad for gold," said Edward Moya, a senior market analyst at OANDA. "
"if we do start to see inflation accelerate and people start to think that interest rates will rise again, then gold may struggle a little bit," said Rona O'Connell, an analyst at Stoneex.
Technical analysis
From the daily chart, the gold price fell twice in a row, and the bullish rally paused, but it is still expected to continue to rise in the short term or rise again after stepping back slightly, as the main support below is not far away around 1720.
If it continues to fall within the day, it is expected to gain support and rebound around 1720. If there is an uptick, you need to pay attention to the resistance around the 23.6% Fippo level of 1743. If you break through the front line of 1743, you can look at the high line of 1758 on April 8, and pay further attention to the low of 1764 on November 30th.
If it unfortunately falls below the 1720 line, then take a further look at the support of the 1700 integer gate and the strong support of the stage low 1676.
