SMM: Wednesday (December 9) gold market pressure fell sharply, spot gold prices test 1840 US dollars / ounce support, the day fell more than 25 US dollars, or nearly 1.5%.
Data released in the evening show that the final value of wholesale inventory in the United States in October is 1.1% compared with the previous month, with an expected value of 0.9% and an initial value of 0.9%.
The interest rate decision of the Bank of Canada has been announced, with a policy rate of 0.25%, an expected rate of 0.25%, and a previous value of 0.25%. "keep the size of QE purchases of C $4 billion a week unchanged and will continue to implement QE until the economic recovery is in sight. Keep the forward guidance on policy interest rates unchanged, reiterating that the lower end of the effective interest rate channel is 0.25%. The Canadian dollar strengthened, thanks to a broad weakening of the dollar against other currencies. The government is bailing out companies and families, which is supporting the recovery. "
Precious metal
Rhona O'Connell, head of market analysis at StoneX, said the market was reassessing risks across the system, thus driving gold prices higher. "Gold prices have previously broken through the 20-day moving average, and then look at the 50-day moving average of $1879 / oz, which currently looks difficult to break through, with the lower support at the 20-day moving average of $1845 / oz."
(ING), the Dutch international group, said the golden periodic bull market was not over yet. In the medium term, the bank expects US interest rates to pick up slightly next year, but inflation expectations will rise faster than interest rates, so real interest rates will fall further, which is also good for gold.
Jeffrey Halley, a senior market analyst at Oanda, said gold is now in a much better position than before in the face of the impact of the vaccine, and lower prices will attract bargain-hunting.
(UOB) of United overseas Bank believes that Bitcoin is challenging the status of gold, while the gold market looks less bullish than it used to be. The bank cut its gold price forecast for 2021. Gold prices are expected to be 1850 US dollars per ounce in the first quarter of next year, 1900 in the second quarter, 1950 in the third quarter and 2000 per ounce in the fourth quarter. There is little chance of a massive decline in the gold market to $1670 an ounce, but it is too early to confirm a reversal of the trend. In the short term, $1720 an ounce is an important support level. "
Foreign exchange market
Nomura said Asian currencies were expected to rise more significantly against the dollar in the first quarter of 2021, with the offshore renminbi estimated at 6.30. Short-term Asian bonds / interest rates and high-yield bonds should also perform well in the first quarter of next year, mainly supported by positive developments in vaccines, possible further stimulus from the Federal Reserve and the European Central Bank, and Biden stimulus. In the second half of 2021, markets may begin to reflect the normalization of monetary policy. As Asian countries normalize their current accounts and balance of payments, the rise in debt denominated in local currencies will highlight the fragility of individual Asian currencies; the Indonesian rupee and Thai baht are expected to lag behind other Asian currencies.
ING said bipartisan talks on fiscal stimulus in the United States would receive further attention. Finance Minister Manu put forward a $916 billion proposal to Pelosi, but the calm reaction from Democrats suggests that more negotiations are needed. Nevertheless, the initiative shown by the parties concerned is enough to keep the market optimistic, which will limit the ability of the dollar to recover. The euro / dollar has consolidated above the 1.2100 mark and is likely to hold steady until a series of blockbuster events spread to the euro on Thursday.
Yohay Elam, an analyst at FXStreeet, pointed out that with the economic stimulus, Brexit and a promising technical outlook, the currency was prepared to hit 1.22.
Lukman Otunuga, a research analyst at FXTM, said that from the technical chart, the euro is firmly bullish, while the daily chart closing firmly above the 1.2175 level may open the door to testing 1.2300.
