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Original title: Gold once fell below 1820! Three factors are driving risk sentiment: Brexit will continue to be debated in the days ahead.
FX168 Financial News (London) News Monday (December 14) In the European market, gold fell once below the 1,820 USD / ounce line. Market risk sentiment continues to improve, mostly on the launch of the new crown vaccine, hopes for the US stimulus bill and some optimism around Brexit. The safe haven nature of gold was thwarted, but was supported by the falling dollar.
During the day, gold fell nearly $ 20 below the $ 1840 mark, mainly due to the suppression of safe haven demand. On the contrary, risk assets such as the stock market and crude rose.
As of this release (6:29 PM Beijing time), the UK FTSE 100 Index, German DAX Index and French CAC Index increased 0.42%, 0.97% and 0.90%, respectively. The futures market also shows that US stocks will open higher today. Futures on the Dow Jones, S&P and Nasdaq indices are up 0.68%, 0.60% and 0.41% respectively. The price of Brent crude surpassed US $ 50 / barrel on the day and was up 1% on the day.
On Sunday, Britain and the European Union once again pushed back the deadline for Brexit negotiations, but did not specify a specific date. Some British officials revealed that negotiations may continue until Christmas.
Although the expected trade deal is yet to be finalized, and both sides have expressed big differences, investors still tend to believe that a deal can be reached in the end. “The market regards this as good news with some meaning and believes that some kind of deal will eventually be reached,” said Paul Leech, co-director of Barclays Global Equity.
This morning local time, Barnier, the main negotiator for the European Union, told reporters that an agreement is still possible. He said: “We will give this agreement every opportunity … it is still possible. We can reach a good and balanced agreement.”
“The two conditions have not yet been met. Free and fair competition … and agreements that guarantee mutual access to markets and waters. We have not found a proper balance with the British on these issues. So we will continue to work hard.” .
He tweeted today: “The next few days are crucial.”
The senior British EU diplomat said Brexit negotiators from the UK and the European Union made some limited progress in trade negotiations between the UK and the European Union on Monday, but there are still differences in terms of state aid and they have taken another step in fishing.
Interactive Investor Marketing Director Richard Hunter said: “Although it is too early to predict that the Brexit cloud is clearing, (the expansion of the negotiations) still leaves optimists with hope that the potential will still be avoid. Confusing results of disagreement. “
Another factor that continues to drive market risk sentiment comes from the new corona vaccine. Since Pfizer announced on November 9 that the vaccine’s efficacy is above 90%, the S&P and Nasdaq indices have broken record highs multiple times. On Friday local time, the United States Food and Drug Administration (FDA) urgently approved the new corona vaccine jointly developed by the American pharmaceutical company Pfizer (Pfizer) and the German company BioNTech, further boosting the risk market. .
At the same time, the hope of the US stimulus bill is also a major driving force for bullish venture capital. The Netherlands International Group noted that in terms of the stimulus bill, the market today will await comments from the US Secretary of the Treasury, Mnuchin, and the leader of the House, Pelosi. Details of the bipartisan’s $ 908 billion proposal will also be revealed today, but it will be difficult for the proposal to pass through Congress.
The latest plan is reportedly to split the $ 908 billion into two parts: One of the bills is a $ 748 billion proposal, which includes funds for small business loans, unemployment benefits and vaccine distribution; the other package includes 160,000 million. State and local aid in US dollars, including liability protection for businesses and other entities – these are the two most sticky points.
But Absolute Strategy Research warned that in the latest survey of market sentiment by vendors on Monday, investor optimism for 2021 is moving in the dangerous direction of “collective thinking.”
Among those surveyed, a record respondent believes global stocks will be higher within a year, which is the most optimistic finding of the survey in six years.
ASR said: “If the consensus stance is challenged by events, this crowded view will lead to volatility.” They added that policy makers should be concerned about the “gulf” between their cautious macro outlook and investors’ expectations of a strong recovery. .
For the gold market outlook, the financial website Economies.com expects the first bearish target to be US $ 1807.00 / ounce, and the lowest target to be US $ 1790.00 / ounce. a breakout of the $ 1850.00 / ounce resistance will occurGold priceThe key factors to continue the short-term uptrend, the first bullish target is $ 1875.00 / ounce, and the highest target is $ 1900.00 / ounce. Today’s gold price trade is expected to lie between the support level of $ 1815.00 / ounce and the resistance level of $ 1855.00 / ounce.
Ole Hansen, Director of Commodity Strategy at Saxo Bank, said: “I think investors should close their accounts and wait until January to come back.” Hansen said that while he has a neutral opinion on gold, he is also concerned about the slightest resistance before the end of the year. The road is down. “We saw gold rebound strongly from the November low, and then it was resolutely rejected at the 50-day moving average.” Hansen added that the market is also forming a short-term head and shoulders pattern. If the neckline exceeds $ 1,825, the price can resume. Try the November low.
Marc Chandler, chief market strategist at Bannockburn Global Forex, said the gold market looks a bit weak because new highs are hard to hit. He said: “Gold’s rebound in the callback range failed, rather than triggering a new wave of earnings. The price of gold must rise above $ 1888 to trigger a new wave of earnings.” He added that he expected the initial support level to be located. At $ 1820, the additional support sits at $ 1800.
Adrian Day, Chairman and CEO of Adrian Day Asset Management, said he has a neutral opinion on the recent price of gold but still tends to be bullish. “The price of gold may trade in a tight range next week, but I expect it to trend upward. It has survived the main test of falling below the 200 moving average. I am still bullish on the future; we have bottomed.” .
Charlie Nedoss, senior market strategist at LaSalle Futures Group, said he expects the dollar to weaken further this week, which will support the price of gold. “This week the Electoral College will vote and Biden will officially become president-elect. I think this means that we are expected to see stimulus measures next year, which will put pressure on the dollar.”
Forexlive.com senior market strategist Adam Button said that as the dollar weakens, he is bullish on gold because late December is the start of the strong gold season.
At 6:57 p.m. Beijing time, spot gold was trading at $ 1,823.00 an ounce.
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