Spot Gold Analysis

On Monday (February 6) in the early Asian market, spot gold fell first and then rose, and is now reported at $1,874.3 per ounce. Looking back at the market last Friday, the price of gold last Friday maintained a volatile operation during the Asian-European trading session. After hitting a daily high of 1,918.4, it was under pressure. Stimulated by the data during the US session, the price of gold fell rapidly, falling to 1,861.2 at one point, and finally closed at 1,865.2 USD/ ounces, a long Yin K-line was closed on the daily line.

On the news side, the non-agricultural data released last Friday was exceptionally beautiful. The non-agricultural employment population increased by 517,000 after seasonal adjustment in January, much higher than the forecast of 185,000. The U.S. unemployment rate recorded 3.4% in January, a 53-year low. This excellent report card detonated the dollar market. In the Federal Reserve’s interest rate decision announced in the early hours of last Thursday, the 25 basis point rate hike was in line with market expectations; then Powell revealed at a press conference that the Fed will not end its tightening policy prematurely, and more data support is needed to confirm inflation. Persistence of decline. Recently, the IMF has raised China’s economic growth forecast for 2023 from 4.5% to 5.2%. The economic recovery will boost the demand for materials, and the rise in commodity prices is not conducive to the fall in inflation. In summary, the market predicts that the Fed will continue to raise interest rates.

With regard to the conflict between Russia and Ukraine, the intensity of the war may be escalated because Western countries aid Ukraine with tanks. The market’s analysis of the Russia-Ukraine situation, on the one hand, geopolitical tensions will trigger risk aversion and limit the decline in gold prices. On the other hand, the deterioration of Russia-Germany relations will put pressure on the euro and boost the dollar. Therefore, there is a risk of violent fluctuations in the short-term market.

On the technical side, the spot gold market closed negatively on the weekly line, breaking the continuous upward momentum for many weeks, and the long upper shadow line means that there is strong selling pressure from above. On the daily line, relying on the lower track of the Bollinger Bands to launch an upward attack, the KD indicator is dead fork; in the 4-hour period, the gold price pierces the lower track of the Bollinger Bands and then rebounds upwards, the KD indicator sticks to the low position, the 1-hour chart, the bulls have strong momentum, and the KD indicator golden fork. The current market is fluctuating and correcting. Although there has been a rebound, the short positions are relatively strong in the big cycle. Therefore, it is recommended to short rallies.

Resistance position: 1,878/1,885/1,891

Support position: 1,860/1,854/1,848

Investment Advice:

Empty near 1,878-1,880, defend 1,885, target 1,870/1,860/1,850.

Analyst: Mr. Chris Lau, Independent Analyst

Goldwell Capital Co., Ltd. endeavours to ensure the accuracy and completeness of this research report. However, as the market is subject to change, the Company and our subsidiaries do not guarantee its completeness and accuracy, and the information is for reference only. Any person shall not regard such information as Goldwell Capital Co., Ltd. on leveraged foreign exchange, precious metals, stocks, and other financial products to provide real quotes, suggestions, solicitation and inducement of investment. Guests should be aware of the risks involved in the investment, the volatility of the investment market and the risk of loss can be very big, guests must carefully consider their own financial situation and investment purposes, to decide the direction of investment and the kind of investment products that are suitable for their owns.
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