Gold market analysis: strong support at $1864 and $1875 will limit the downward trend of gold prices
Last Friday (January 13), the price of gold continued to violently rise by 1.20%, and it continued to hit a high of $1921.86 per ounce since April last year.
Data on Thursday showed U.S. inflation cooling, bolstering expectations that the Federal Reserve will slow the pace of rate hikes. Speaking to a local group in Malvern, Pa., on Thursday, Philadelphia Fed President Harker said: “A quarter-point hike going forward would be appropriate.” Meanwhile, a University of Michigan survey released Friday showed U.S. consumers are increasingly confident that price pressures will ease significantly over the next 12 months, with a survey on Friday showing their one-year inflation expectations fell in January to the lowest level since spring 2021. Some economists believe that lower inflation expectations give the Fed room to continue to ease its aggressive monetary policy stance. According to the CME FedWatch tool, there is a 94.2% chance that the Fed will raise rates by 25 basis points following the release of the U.S. inflation data. If the Fed fails to counter market expectations that U.S. interest rates are about to peak, an eventual rate cut remains a possibility, which could tempt gold bulls to step up their efforts to hit past higher levels.
On the technical level, the market has stabilized at the 1900 position at the close of Friday. In terms of form, the next monthly K is to hit the 1950 position. Month K is currently a golden cross, with bulls controlling the market; month K is currently in the form of 3 consecutive suns, and we must beware of the retracement in February to adjust the trend downward; the upper pressure positions are 1950-1970-200-2030-2050-2070 Great pass pressure position. Zhou K Lianyang rises, forming 4 consecutive Yangs upward, the indicator is golden cross, and the bulls are mainly controlling the market! The pressure position for the next shock is the 1970 position. Therefore, combined with the big cycle, the pressure position of week K and month K is 1950-1970. Among the daily K levels, the indicator is golden cross, and the bulls control the market. But we can see that from 1615 to the current position to 1920, the increase has reached 300 US dollars. This calls for attention! After such a large increase, we must be careful to guard against the risk of profit-taking adjustments. If there is a pullback in gold prices, then the previously lost weekly chart cloud top ($1875/oz) and rising 10-day moving average ($1864/oz) will provide strong support, and these levels should limit the downside movement of gold prices.
Wang Gang, Guangdong Branch, Bank of China
Opinions are personal and do not represent those of the organization
