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Oriental Fortune News on the 22nd, gold futures first declined and then rose on Tuesday, reaching an intraday low of $1,226.80 per ounce, but after Markit announced the service After the initial values of both the industrial and manufacturing PMI industries fell, the price of gold rebounded with the support of bargain hunting. As the Federal Reserve is expected to raise interest rates next month, the U.S. dollar has been boosted and its strong rise has put pressure on gold, but political and economic uncertainty in Europe and the United States continues to support gold.
As of the close, COMEX April gold futures fell by US$0.20, or less than 0.1%, to US$1,238.90 per ounce.
On the news, on Thursday, Beijing time (February 23), the Federal Reserve will release the minutes of its January monetary policy meeting. Tokyo-Mitsubishi UFJ Bank Currency Analyst Lee Hardman wrote on Tuesday pointed out that the minutes of this meeting may release another hawkish signal. For gold, which only has the function of insurance, interest rate hikes by the Federal Reserve are often negative for gold prices.
At the same time, Federal Reserve officials will make intensive appearances this week, and their remarks will become one of the factors that dominate the market. Federal Reserve Voting Committee Harker recently reiterated that it is appropriate to raise interest rates three times in 2017 and does not believe that the Fed is now behind the interest rate curve. January inflation data shows that inflation is continuing to move toward the Fed’s target. It is expected that inflation will reach the Fed’s target later this year or next year, and the U.S. economy will more or less return to full health.
In addition, the US dollar rose sharply by nearly 0.5% in the morning, standing above the 101 mark. A strong U.S. dollar also weighed on gold prices.
However, an industry report released by financial data company Markit on Tuesday (February 21) showed that the U.S. service industry Purchasing Managers Index(PMI) initial value was lower than forecast and last month’s final value. 50 is the watershed that marks the industry’s contraction or growth. Data show that the initial value of the MARKIT service industry purchasing managers index (PMI) in the United States in February was 53.9, with an estimate of 55.8, and the final value in January was 55.6.
Markit Chief Economist Williamson commented , the decline in PMI data indicates that the upward trend since the U.S. election has slowed down; business output growth, new orders, and employment have all declined, while inflation has been suppressed.
After the release of PMI data, international gold futures rose in a straight line in the short term, rising from a daily low of US$1,226.8 per ounce to around US$1,232.9 per ounce.
Judging from the performance of market positions, the investment demand for gold can be seen from the world’s largest gold ETF, SPDR As reflected in its positions, since January 31, its positions have increased by 5% to 27.044 million ounces.
From a technical point of view, the technical support level of gold is near the 21-day moving average, which is US$1,221/ounce, and US$1,250/ounce is the main obstacle; an upward breakthrough will encounter Fibonacci resistance level $1,255/oz. If the price of gold can stabilize above $1,221 per ounce, it is not very likely that it will fall sharply.
Regarding the outlook for gold prices, analysts have looked for support from political uncertainty.
Robin Bhar, an analyst at Societe Generale, said: “Gold is subject to the possible tightening of U.S. monetary policy at some stage, and March is more likely. There is a lot of political uncertainty, and there is still money. There is an inflow into gold due to safe-haven demand.”
Bhar added that gold is also an investment tool to hedge against overvalued stock markets.
INTL FCStone analyst Edward Meir said, “It is really impressive that gold has continued to rebound even as U.S. stocks continue to reach new highs. The U.S. dollar is also quite strong.” He believes that gold’s support comes from various markets in 2017. political and economic uncertainty.
(Editor: DF318)
