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Original title: Gold recommends holding long positions in the fourth quarter. Source: Original
On Tuesday, the US fiscal stimulus negotiations are expected to improve into short-term support.Gold priceThe most important factor for this is that the US dollar index has recently swung below the 93 mark. Spot gold has maintained its swinging upward status since late September, currently hovering around $ 1920 an ounce. In the near future, the overall volatility of gold prices is relatively limited, with volatility of only about US $ 20. Since bottoming out and rebounding in late September, market volatility has gradually weakened, making it difficult for the trending market to emerge, and oscillation has become the main tone. In the near term, there is a chance for the bulls to hit $ 1,930 an ounce, but the momentum for further improvement has yet to develop. Below 1870 US dollars / ounce is the key support, there is a risk of falling after the breakout.
From the perspective of events, the current market is more concerned with two American factors. These two factors are also potential factors that can break the low volatility of gold prices. One is the landing of the US fiscal stimulus and the other is the US elections.
The main rationale for the return in the price of gold since mid-August is that the US stimulus policy has been delayed. So far, the two sides in the United States are getting closer and closer to consensus. On Tuesday, the Speaker of the US House of Representatives, Pelosi, set a deadline to reach negotiations on the stimulus plan before the elections and expressed optimism about the possible new assistance agreement for crown pneumonia. At the same time, despite Republicans in the Senate opposing the large-scale stimulus plans, US President Trump continues to push for a comprehensive bailout plan, saying he will accept a deal of more than 2.2 trillion dollars. The landing of the US fiscal stimulus is very likely, and the current hurdle lies in the scale of politics. No matter when it landed, there will be support for the gold price, but the landing time affects the rate of fluctuation of the gold price. Personally, I think the Democrats will not choose to compromise before the election. Passing the bill before the election can only be a compromise on the Republican side. After all, passing the bill is to Trump’s advantage.
The image shows the golden week spot.
The result of the United States general election on November 3 will fall. Considering that the price of gold has been oscillating for a long time, the result of these general elections may become the key for the price of gold to break the pattern of oscillation. The volatility of the gold market is bound to increase, so we recommend that you increase volatility strategically and buy high value put and call options, that is, buy a broad spectrum mix. The above strategy is a defensive strategy, once there is a small probability of tail risk, the effect of the strategy will be better. On the other hand, the trend before the 2016 general elections is very similar to this year. Both fell before the general elections. After the 2016 general election, it continued to fall. But this year we think the logic is completely different. No matter which president is elected, there is a high probability that they will continue to increase their stimulus. After the end, we believe that the price of gold is still difficult to go down.
In the medium term, the main logic of the gold market revolves mainly around the advance of the epidemic and the difference between the global economic recovery and market expectations. In terms of the epidemic, if the world can usher in another outbreak in winter and if there is progress in advancing the vaccine, it still affects market sentiment. At 12 o’clock on October 21 Beijing time, the cumulative number of confirmed cases of new coronary pneumonia in the world exceeded 41.04 million. The number of confirmed cases of new coronary pneumonia in the United States on Tuesday rose by at least 60,499, with a total of 8.31 million confirmed cases. Compared to the United States, the advance of the epidemic in Europe is more worrying for the market. At present, European leaders have stepped up measures to slow the spread of the crisis: after sporadic restrictions have had little effect, they have reinitiated blockades in some areas. From the perspective of vaccine progress, we are not pessimistic about the long-term control of the epidemic in European and American countries, but the spread of the epidemic in the medium term remains difficult to fully control. Judging by the performance of economic data, apart from China, the epidemic remains a problematic factor in the economic recovery of other economies. The world economy in the fourth quarter is likely to maintain the status quo or poor expectations. Therefore, as long as there is no significant improvement in the epidemic or vaccines, we believe that the price of gold in the fourth quarter remains a bullish atmosphere.
(Author unit: Hongyuan Futures)
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