Gold futures rely on 4 forces to create a record high and a golden cross is in sight | Anue Juheng – Gold

gold futuresOn Friday (1st), it surged to US$2,089.70 per ounce, setting a record closing high and heading towards the “goldCross”, the main reason is the speech by Federal Reserve Chairman Jerome Powell, which strengthened the market’s confidence that the United States has completed monetary tightening and will start cutting interest rates next year.

• New York for February deliverygold futuresIt closed up $32.50, or 1.6%, at $2,089.70 per ounce, setting a new record closing high, surpassing the $2,069.40 originally written on August 6, 2020.
• gold futuresThe intraday high reached as high as US$2,095.70 per ounce, which also rewritten the intraday record of US$2,089.20 set on August 7, 2020.
• goldThe spot price rose 1.6% to US$2,069.10 per ounce, with a total increase of 3.4% this week.
• goldSpot prices hit $2,075.09 an ounce earlier in the session, rewriting the intraday record of $2,072.49 set in 2020.

Ball speech

Powell reiterated the Fed’s “cautious” stance on future decisions on Friday and said the Fed was not considering cutting interest rates at this time.

Tai Wong, an independent metals trader in New York, said: “goldBulls focused on Ball’s warning that interest rates were already at restrictive levels, which provided support for the theme that a rate cut was imminent, and apparently did not take Ball’s warning about premature speculation on interest rate cuts to heart. “

The CME Group’s FedWatch tool shows traders are now betting on a 60% chance of a rate cut in March, up from 50% before the speech.

Edmund Moy, who once worked at the U.S. Mint and is now a senior strategist at IRA U.S. Currency Preparation, analyzed that after the United States announced on November 14 that the consumer price index (CPI) was flat in October, it started togoldThis wave of gains is because the market believes that this means that the Fed has “tamed inflation, the rate hikes may be over, and it is likely to cut interest rates earlier than originally expected.”

An interest rate cut means lower U.S. bond yields. Since U.S. bonds are denominated in U.S. dollars, the demand for U.S. bonds decreases, which naturally means a decline in U.S. dollar demand. All of this boosts U.S. dollar-denominated stocks.gold。

towards “goldcross”

The most actively tradedgold futuresOn Friday, it was about to hit the “goldCrossover”, that is, the short-term moving average price breaks through the long-term moving average price.goldThe 50-day moving average was $1,955.44 on Friday, while the 200-day moving average was $1,955.51 on Friday.

Gold Newsletter editor Brien Lundin said that althoughgoldThe current surge is a bit overheated, but from “goldThe “crossover” and all-time high pattern is like a magnet and could see further gains in gold prices in the short term.

Peter Spina, president of GoldSeek.com, said that the price of gold in other currencies around the world has hit a new high before. Now that the U.S. dollar has finally joined the party, it is conceivable that there will be another wave of buying in the market, and the price of gold will rise in the next few months. rose sharply monthly.

Dollar weakens, safe-haven buying

Spina points out that not onlygoldHitting new highs, the U.S. dollar is also hitting new lows against major currencies.

ICE measures the U.S. dollar against six major currencies dollar index (DXY) is down 0.3% year-to-date after a pullback in November. The dollar’s purchasing power is now relatively more eroded, Spina said.

The dollar fell 0.2% on Friday,10-year U.S. Treasury yieldfell to a two-and-a-half-month low, becominggoldUpward momentum for the day.

Bas Koojiman, CEO of DHF Capital said,goldAnother force for the rise came from safe-haven buying brought about by the end of the ceasefire between Israel and Kazakhstan and renewed tensions in the Middle East.This encouragesgoldThe upward trend over the past two months has been driven by bets on U.S. interest rates.

Evertt Millman, Chief Market Analyst at Gainsville Coins said: “goldThere is a Christmas market, and I think it can last until the end of the year. “

Is gold overbought?

However, Standard Chartered analyst Suki Cooper believes that gold prices may have entered overbought territory, and over the past two years, gold prices havegoldThere is a problem of premature pricing of monetary policy expectations.

FXTM market analysis manager Lukman Otunuga said the likelihood of the Fed cutting interest rates in March will depend on multiple economic data, including CPI and non-farm payrolls.

“Given that the daily relative strength indicator (RSI) remains in overbought territory,” he said.goldIt may face technical resistance before rising. “

Gold Newsletter’s Lundin also warned that unlessgoldCan clearly break through the new plateau period above $2,100 per ounce, otherwisegoldThe fact that it has reached an all-time high may mean thatgoldA “quadruple top” pattern appears, which in turn constitutes resistance to price increases.