Vang SJC

In early trading week yesterday (14/12), gold prices fall sharply eve of the meeting of the Federal Reserve (Fed) took place this week. Ending the session, the price closed at $ 1,059.56 / ounce, down 1.3% compared with the opening price $ 1,073.27. During the day, the price ranged between $ 1,077.61 wide margin and $ 1,058.56 / ounce. The reason why precious metal prices plunged yesterday you can see here.


Fundamental analysis

Gold prices are still under pressure to go down before expected Fed rate hike. After two reports reached jobs in October and November exceeded the market’s expectations, investors expect the Fed reinforces raise interest rates. Yesterday, CME Group’s Fedwatch raised bets the Fed will act this week to 81.4%. Psychology lost faith in the precious metal as pressure gold prices downward.

Markets in psychology waited policy meeting held on 15-16 / 12 (US time), with expectations the Fed will raise interest rates for the first time in almost one decade. Fed Chairman, Mrs. Janet Yellen will have to decide not only on the issue of whether or not to raise interest rates, but also to ensure the market on track to raise interest rates once. The transaction is expected to raise interest rates at a rate of 2 or 3 times next year. The prospect of Fed rate hikes as hurting the precious metals, gold prices go down further.

In the US, today Labor Bureau of Statistics will provide consumer price index CPI and the CPI excluding energy and food. Although the CPI is not the Fed “favor” as the index of personal consumption PCE but also an important indicator for inflation. Because oil prices are plunging brake should not be forecasted CPI rose while Core CPI not be expected to rise 0.2%. Two indicators were maintained below 0.2 since the second quarter / 2015, showing US inflation is low. Meanwhile, inflation is one of the development goals of the Fed. So, in the two-day meeting of 15-16 / 12 (US time), Open Market Committee (FOMC) is expected to raise interest rates only by 25 basis points rate hike route also very slowly . The index of consumer prices affecting retail prices (Retail Sales) increased 0.2% in November only by the forecast while the core index rose 0.4% retail, 0.1% higher than forecast shows only Today’s CPI is difficult to increase. US Dollar unsupported may push gold up.

In this context, many analysts have predicted pessimistic about gold prices. Goldman Sachs Group Inc. predicted gold would reach $ 1.050 / ounce in the next 6 months, and will be only $ 1,000 / ounce in one year to raise interest rates as the Fed, according to reports Tuesday 18/11. The precious metal will average $ 995 / ounce in the next year, in the context of a stronger dollar and investors seeking returns from bonds and equities, according to Citigroup Inc. ABN Amro Bank NV predicted prices could go below $ 900 / ounce in 2016. Pessimistic more, Barnabas Gan, an economist at Oversea-Chinese Banking Corp (OCBC – Predicting exact precious metal prices in quarter III, as ranked by Bloomberg) receives a yellow dinhgia will decline every quarter, and to $ 950 / ounce by the end of 2016. Mr. Gan also said that the amount of gold held in ETFs will continue to decline further in the years I.

Verdict of the famous analyst reinforces psychological “away” precious metals, hurting the gold price.


Technical Analysis

Currently, at 15:55 GMT + 7, the precious metal is trading at $ 1,062.65 an ounce, slightly higher than the opening price $ 1,060.81 / ounce.

In the Asian session, prices fluctuated in a narrow range with small volume suggests investors are pouring capital into more profitable channels such as securities, currencies, temporarily leaving the position gold holdings.

Prices clearance test and then turning up 61.8 points, which is currently trading around this block. Prediction current H1 candle can not break this resistance. However, prices are likely continue to fall to its lowest level yesterday at $ 1,058.56 / ounce.

Besides, engines started MuaEA SIGNAL TREND for last sell signal in Europe, currently giups we earned 37 points. Engine indicator continues to sell today.


Psychological Analysis

The expectation the Fed raised interest rates in December was covered market, adversely impact the gold price. Precious metals are still in downtrend. The market is anxiously waiting for the Fed policy meeting next week will decide the direction of precious metals prices.

Observe the H1 chart in Technical Analysis can see currently has 6 plants should be reduced compared with 4 candles rose. Average body of 6 candle fell 92 points, while 4 candle candlestick increase averaged 37 points, indicating more selling pressure remains strong buying power.



Although still subject to downward pressure eve of Fed meeting mid-week, there are positive signs helped gold prices rally in the near future.

World Gold Council (WGC) announced updated periodically statistics on the official gold reserves of the country. The changes are adjusted as gold reserves increased in the second half of 2015, Russia (95.6 tons during the period May 7-10), China (83.9 tons in 5 months up to August 11), Kazakhstan (11.7 tons within 4 months of the end of October). WGC expects these countries will continue to buy gold with the same speed. Speculative demand in the country may support precious metal prices go up.

Upcoming New Year of the Asian countries, gold jewelery demand is expected to increase. Gold imports by India, the country’s second largest gold consumer in the world, doubling in November, amid the gold price dropped to 5 year lows boosted demand peak during the festival and wedding season , peaked at 101 MT from 45 MT in May 10. Demand flourishes in India and China can support the gold price rally in the near term. Reports from Russia also showed gold output in the first 10 months declined from 246.1 tons to 243.9 tons in gold mining output also fell, indicating the loss of precious metal prices also affected profits of the miners. Supply and demand weakened in Asia increases will push gold prices rise in the future.

Observe the H1 chart, the price could prevent turning up on 61.8 and 50.0 in clearance towards $ 1,067.39 / ounce.

Market Commentary

Gold prices continued downward pressure on expectations the Fed to raise interest rates in the policy meeting March 12. The market is anxiously waiting for the Fed policy meeting of the 4th and 5th this week. The market is waiting for economic data from the United States to strengthen the Fed tightening, predicted prices will not fluctuate sharply today. Downward pressure is still hanging over the market, the price may hit $ 1.053 / ounce.

However, the factors mentioned in the risk analysis, gold is likely edged up in today, expected to reach the $ 1.071 / ounce.

Analyses of Group IF24h

Linh Nhan