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The Fed does not move according to market expectations. The short-term fluctuation of gold does not change.

November 09, 2018 03:50
source: FX168
edit:Eastern Fortune Network

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Summary
[The Fed did not move in line with market expectations. The short-term fluctuations in gold did not change.] Spot gold continued to fall after the Fed announced that interest rates would remain unchanged on Thursday, and the US market dropped to a minimum of $1219.59 per ounce. The price of gold was briefly supported after the announcement, and the short-term jump jumped by $2, but it quickly fell again. The price of gold still runs below the 1230 mark. The US dollar index rebounded after a brief decline of more than 10 points after the announcement, and did not change its previous gains. The US dollar index has already run above the 96 mark. (FX168)

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Spot gold announced at the Federal Reserve on Thursday (November 8)interest rateAfter the change, the market continued to decline. The lowest price in the US market was $1219.59 per ounce. The price of gold was briefly supported after the announcement. The short-term jump was $2, but it quickly fell again. The price of gold still runs below the 1230 mark. . The US dollar index rebounded after a brief decline of more than 10 points after the announcement, and did not change its previous gains. The US dollar index has already run above the 96 mark.

(Gold 5 minutes chart source: FX168 financial network)

(US dollar 5 minutes chart source: FX168 financial network)

Federal Reserve FOMC statement said that the Fed decided to maintaininterest rateUnchanged, the committee members unanimously agreed to the decision to keep interest rates unchanged. The Fed decided to meet market expectations. The statement said that the economy and work grew strongly and the labor market performed strongly. The Fed keeps interest rates unchanged and expects to “further increase interest rates”. The unemployment rate has fallen and household spending has grown strongly. Long-term inflation expectations have remained basically unchanged. Reiterate that the recent economic risks are “roughly balanced”. Overall inflation and core inflation remain around 2%. Reiterate that the federal funds rate will gradually increase, in line with the continued expansion of the economy, strong job market and inflation targets.

According to CME "Federal Watch", before the FOMC statement, the probability of the Fed raising interest rates by 25 basis points to 2.25%-2.5% in December this year was 75.0%; after the announcement, the Fed raised interest rates by 25 basis points to 2.25% in December this year- The probability of the 2.5% interval is 71.4%.

In the peripheral market, the release of the Fed statement is basically in line with market expectations, so the impact on the market is limited. As of press time, the US dollar index rose 0.28, or 0.29%, to 96.49. The Dow rose 42.05 points, or 0.16%, to 26,222.35 points; the S&P 500 index fell 4.86 points, down 0.28% to 2,803.63 points; the Nasdaq fell 41.12 points, or 0.54%, to 7 or 77.46 points. US oil fell 1.44% to $60.79 per barrel, and oil fell 1.06% to $71.01 per barrel. US Treasury yields for the two-year period hit 2.969% and were tested again for nearly a decade and a half.

The US initial jobless claims last week fell slightly but were in line with expectations, recording 214,000 (previously revised to 215,000), while the current total number of US jobless claims is at its lowest level in 45 years. The data shows that the US labor market continues to perform strongly.

According to the analysis, when interest rates rise, gold itself does not provide a rate of return, and often loses the favor of investors. As a reflection of the gold investment sentiment, the world's largest gold-backed exchange-traded fund SPDR Gold Trust shares fell for the fourth consecutive trading day on Wednesday. DailyFX's foreign exchange strategist Ilya? Ilya Spivak said, "The outflow of gold exchange traded funds shows that the Fed promises to tightenGlobal interest rateIn the case of interest-free and illegal assets, the attractiveness of the decline. ".

In terms of physical gold, according to the third quarterly report of the World Gold Council, South Africa, as one of the world's largest gold producers, hit a three-year low in September. Data show that South Africa's gold production fell by 19% year-on-year in September this year, which is the biggest monthly decline in the country's gold production since 2015.

South Africa used to be the country with the highest gold production in the world, but its output has fallen sharply since the 1980s, with a drop of over 80%. As of September, South African gold production has fallen for 11 consecutive months.

According to the World Gold Council report, South Africa’s gold mine output fell 10% year-on-year in the third quarter of this year. Because the country has a large number of gold mines that are difficult to mine, and the mining industry is highly labor intensive, it has been under pressure in recent years and has to reduce personnel expenditures to maintain the operation of these gold mines. In 2017, South Africa's gold production was about 150 tons, ranking seventh in the world, but it has been significantly reduced compared to its previous production.

At present, from a technical point of view, the price of gold is still turning into a consolidation at the 1230 mark, and the short side is still in the near-term technical advantage. The next goal for the gold bulls is to hold above the 1230 mark and then hit the 1250 mark. The short-term goal is to pull the gold price back to the low of 1200 and then hit the monthly low of $1183.04 per ounce. On the upside, 1230 is the main resistance level, followed by 1240; on the downside, 1220 has been converted into support, followed by 1215 and 1210.

  Outlook outlook

In the past month, the gold traded in a consolidation area, with the upper edge looking at the resistance at 1239 and the lower edge looking at the 1212 support.

At the end of last month, the price of gold hit a three-month high of 1,243.30 US dollars, supporting the bullish market, but is now returning to the neutral mode.

In the short-term, the gold RSI indicator is going down, ready to enter the negative zone, while the MACD indicator fell below the trigger level, just above the zero axis.

If the gold price falls below the 40-day moving average, the downtrend may stop near 1223.70 (the 23.6% Fibonacci retracement of the 1160/1243.30 rally), and the other support nearby is at 1222.80. The downside further support looks at the key 1212 level, which is the above 38.2% Fibonacci retracement.

On the upside, if the gold price moves above the previous high of 1236.38, it may re-measure the upper edge of the range. If the bulls move up further, the focus will return to the 3-month high of 1243.30.

Overall, the current price of gold is biased towards neutral, as it trades horizontally in the short-term channel. However, after the gold price rebounded from 1160, the larger technical figure is still biased upward.

Focus observation>>>

  The Fed maintains a 2.00%-2.25% benchmark interest rate unchanged in line with market expectations

  The Fed hinted that the December rate hike will rise to a new high in the US dollar!

  The dollar and gold will "snap a short love song"

(Article source: FX168)

                (Editor: DF392)

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