Huitong.com, Feb. 24 -- With the seasonal boost of the Lunar New Year and Valentine's Day, the volatility of the market this week is relatively small. Spot** has been trading in a $10 range between $2,020 and $2,030 an ounce for most of the week, although the weekly chart looks more dramatic as the low of Sunday's overnight trading session at 2,012$81 was close to the opening price, while it was 2,012 on Friday afternoonA low of $81. It rose to a weekly high of 2,041 in late trading$41.
With the seasonal boost of Chinese New Year and Valentine's Day, there has been relatively little volatility in the market this week. Spot** has been trading in a $10 range between $2,020 and $2,030 an ounce for most of the week, although the weekly chart looks more dramatic as the low of Sunday's overnight trading session at 2,012$81 was close to the opening price, while it was 2,012 on Friday afternoonA low of $81. It rose to a weekly high of 2,041 in late trading$41.
This week, 11 analysts participated in the Kitco News survey, and Wall Street's view of the outlook has almost completely changed compared to last week. Eight experts (73%) expect gold to trade sideways next week, while one analyst (9%) expects gold to trade sideways in the coming week.
At the same time, Kitco's ** poll cast a total of 203 votes, and the distribution of basic opinions among the mainstream public is the same as last week. 89** (43%) expect gold prices next week**. A further 52 respondents (26%)* will be lower*, while 63 (31%) are neutral on the near-term outlook.
Adrian Day, president of Adrian Day Asset Management, is among those who expect gold prices to go further next week. He said that there were previously indications that the Fed would delay rate cuts after optimistic expectations, causing the market to **, but now the market is ignoring these issues. The fundamentals are positive and supportive.
Senior market strategist James Stanley said that dollar bulls left the door open after the release of last week's CPI report, but given the reaction to Austan Goolsbee's comments not to pay too much attention to the single inflation data, the Fed does not want to accept the hawks' current policy options. This isn't really a single inflation figure: core CPI has been fluctuating around 4% for the past five months, but the Fed's downplay of this makes sense. So far, the market reaction seems to be unanimous. On the other hand, the ECB has been holding a firm stance on the issue of rate cuts, and given the large allocation of the euro in DXY**, this could likewise put pressure on the dollar next week, which I expect to be a positive factor for **.
Adam Button, head of currency strategy, has a counterpoint to the Fed's likely reaction to the hot data. If we get more surprise upside economic data, the Fed will start to lose bias, and if so, we could see a sharp margin.
Bob Haberkorn, senior commodities broker at RjoFutures, said the biggest risk at the moment is whether we get hot inflation data again, as a lot of the moves so far are safe buying, safe-haven assets, and expectations of a rate cut sooner or later. The final release of monthly data has pushed these expectations further down, with discussion still on June but likely September as well. A good foundation has been formed around 2000, and it has been experienced a few times, but the geopolitical risks that may be on the horizon, combined with the US this year, and the Fed's expectations, have kept it at this level. The $2000 support level is good, and anything below that level will quickly be seen as an opportunity.
He said that the main focus of traders next week will be US Treasury yields and US Treasury yields. The strength of the US did limit the movement for the week. The risk environment here is different from that of safe-haven buying. I think personal consumption expenditures and the Fed's speech next week on rate hikes and rate cuts will be the next major drivers. I expect gold prices to stay in this range until the Fed's next announcement.
Haberkorn is confident that the upcoming Fed speakers will maintain a consistent message. If one of them does hint at a rate cut sooner or later, then for now this will be extremely beneficial for the bulls. But given our interest rate levels, it's impressive that gold can hold at $2,000. This only highlights the concerns about the strong demand for ** assets across the board that are currently present around the world.
The release of the Personal Consumption Expenditures** index, a key measure of inflation by the Federal Reserve on Thursday, will be the highlight, but there is a complete to-do list beyond the inflation data. The market will also focus on new home sales on Monday, durable goods orders and consumer confidence on Tuesday, the preliminary US Q4 GDP report on Wednesday, home sales for sale on Thursday and the ISM manufacturing PMI on Friday.
Analyst Darinnewsom believes that the short-term trend on the April daily chart looks to have improved, and the initial resistance could be the recent high of 2045$50. In addition to this, the target is 2061$30, then 2083$20.
Bannockburn managing director Marc Chandler said today, five of the last six trading days. The U.S. Dollar Index also had six trading sessions** in the last seven trading sessions prior to today. He expects the dollar to continue to move lower as the end of the interest rate adjustment is coming to an end, and the market has tended to the three rate cuts that the Fed Point pointed out in December. Momentum indicators are improving. There is still room for spot prices to reach $2,050 in the coming week.
Cieszynski said the move in gold prices was not so much because people became fearful but because we were past earnings season and risk appetite had eased. Every single piece of big news has now been released, and with Nvidia's earnings, Cisco's earnings, all the big names are now reporting results in the US, so we're really at the end of the earnings season now. We don't have any of these factors driving risk appetite up. If we see a risky market taking profits, this could be positive for **. Next week will be bullish**.
Cieszynski said that while next week's PCE report is important, the market tends to underreact to it. In fact, the market often deliberately ignores it in favor of the CPI. And if you look at personal consumption expenditures (PCE), you can see at a glance what the Fed is going to do.
When it comes to the timing of the Fed's pivot, Cieszynski said the Fed is actually looking to make its first rate cut in June if the data allows, and timing is a key consideration. If you're going to cut rates three times a quarter, then you're going to start at the end of June and you're going to do it in June, September, and December. It's like saying 'we're doing a normal thing,' which keeps them away from the U.S. ** period.
If the Fed doesn't cut rates at the end of June, then you'll consider two cuts instead of three, because you're not going to cut rates in July, September, and November. Cieszynski stressed that the move is not to satisfy the market, but to embark on a path of rate cuts that is in line with the election calendar and in line with history.
Mark Leibovit of VR Metals Resource Letter believes that the manipulation of the United States is limiting the strength of the United States, but in any case, foreign buyers are driving the trend. The commentary doesn't actually mention repression, but despite this, spot markets outside the US are wrestling control from the New York Mercantile Exchange. Increases manoeuvrability.
Jim Wyckoff, senior analyst at Kitco, believes that gold prices will remain in the near-term channel next week. Strict technical support is located below the market. However, there is no fundamental catalyst to motivate bulls to go long more aggressively.