Gold prices remained stable near record highs as investors closely watched the escalating tensions in Venezuela and awaited US inflation data.
Gold prices approached $4,340 per ounce, rising by 0.8% on Wednesday. Currently, the price is only about $40 lower than the record high set in October. Inflation data to be released on Thursday will be closely watched for any indication of how it might affect the Federal Reserve’s willingness to cut interest rates further.
The Federal Reserve cut interest rates for the third consecutive time last week, which is undoubtedly good news for non-interest-bearing precious metals. However, the Fed has remained ambiguous about the pace of its monetary easing policy next year. President Donald Trump has said he supports a significant rate cut. Currently, traders believe there is about a 25% chance that the Fed will cut rates in January next year.
Christopher Waller, a governor of the Federal Reserve and a leading candidate for the next chair of the US central bank, supports further interest rate cuts, but he also said policymakers don’t need to rush into action. “With inflation still high, we can take it slow – there’s no need to rush into rate cuts,” he said at a CNBC forum.
Gold prices have risen by nearly two-thirds this year and are on track for their best annual performance since 1979. Previously, the price of gold soared, driven by central banks’ gold purchases and investors’ widespread selling of government bonds and major currencies. Data compiled by Bloomberg shows that the amount of gold held in exchange-traded funds (ETFs) has increased by 18% this year.
Escalating tensions have also enhanced the safe-haven appeal of gold. This week, the deterioration of the situation in Venezuela boosted the price of precious metals. Trump ordered the blockade of all sanctioned oil tankers. The increasing US military presence in the region has intensified pressure on the government of Nicolás Maduro. Leaders of Mexico and Brazil have expressed their willingness to mediate.
Technical analysis:
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Gold: Gold made several attempts to break through and hold above 4340 overnight, but failed each time. Tonight, we need to wait for the CPI data to provide assistance. The ideal strategy for the day is to first wait for the liquidity sweep near 4310/20 and capture the long signal; then wait for the CPI data to push the price to retest the 4340/50 area. Be sure to protect profits as the risk of the Bank of Japan raising interest rates on Friday still exists. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
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The Nasdaq: After the price dropped below 24,864, there has been no rebound signal. We hope that the buy stop at 24,966 will not have the chance to enter. In the future, there will be CPI data and the Bank of Japan’s interest rate hike event. It is recommended to wait and see or continue to maintain low liquidity and then try to capture the rebound signal. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: The blue buy stop operation we alerted yesterday through the plugin was able to capture two good opportunities. The intraday price has once again dropped from around 57. We suggest waiting for the liquidity sweep to clear before considering new rebound signals. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
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Today’s key economic data and events to focus on:
20:00 Official Bank Rate of the United Kingdom
21:15 Eurozone ECB refinancing rate
21:30 U.S. Seasonally Adjusted Initial Jobless Claims (Thousand) (to 1213)
21:30 US November Unadjusted Consumer Price Index (Year-on-Year)
