Vang SJC

Gold prices dropped to near 6-year lows during the session yesterday (17/12), a day after the Federal Reserve System (Fed) announced its decision to raise interest rates after nearly one decade. The price of gold ranged between $ 1,073.25 wide margin and $ 1,047.69 / ounce. At closing, the closing price at $ 1,051.41 / ounce, down 2.1% compared with the opening price $ 1,073.06, the biggest decline since March of this year.

FUNDAMENTAL ANALYSIS

Fundamental Analysis

The market is still affected by decisions of Fed monetary tightening. On 16/12, the Open Market Committee (FOMC) voted through a unified decision to raise interest rates for the first time since 12/2008. The federal funds rate was raised by 25 basis points to 0.25-0.5%. Fed officials have acknowledged the US economy is ready for a rate hike as household spending stable, thriving housing market and the labor market is creating 200,000 jobs average each month, bringing the unemployment rate to 5% -by half period of 2009. Federal Reserve Chairman, Mrs. Janet Yellen said in a press conference after the meeting: “The first thing that Americans should realize That is the decision of the Fed today reflects the confidence of economic institutions in America. “

In the latest draft of the medium-term, the FOMC expects the federal funds rate will reach 1.4% until the end of 2016, before hitting 2.5% in late 2017. Looking back at the most recent tightening times 2004-2006, the Federal Reserve raise interest rates by 25 basis points in 17 consecutive meetings, bringing interest rates in 2006 was of 5.25%. However, Ms. Yellen said the Fed will not act mechanically but will review the data to determine the timing and amplitude of changes in interest rates. Prospects for the Fed to continue raising interest rates caused the greenback become more attractive due to be held no interest bearing gold. Psychology wait no longer, from now until the end of the year, the more likely the market will have to consider the economic data to predict the Fed’s next move as well as gold.

According to the Bloomberg survey, 17 of 28 traders said gold prices will rise in 2016. Mr. Jordan Eliseo, chief economist at the Australian Bullion Co., Sydney also said that gold prices will rise sharply in 2016. In addition, QE trend will continue until next year, inflation in emerging markets like China, Malaysia, Thailand … is still, and gold will be used as a “shield” before the devaluation of the currency caused by inflation. Also, after a long period of dollars invested in the prospect of rising prices, the fund has the ability to sell dollars to balance the portfolio, putting pressure on the greenback and pushed precious metals increase.

Some experts say the trend toward gold rebounded as investors weigh the ability batch future rate hike from the Fed. Professionals in the field of currency and gold said the dollar may slow as the market realizes the Fed is not likely to raise interest rates soon. The Fed’s actions in the future could threaten the stock market, this is a good signal push gold prices up.

However today, the focus of the market is the only administrator of purchase (PMI) service sector Preliminary May 12. PMI is based on a survey of 400 private enterprises in the fields of transport telecommunications, financial intermediation, business and personal services, information technology, hotel and restaurant. The components of this index include sales, employment, inventories and prices. The index greater than 50 indicates the sector is considering growth and vice versa. In December, the PMI services index is forecast 55.9 points, down 0.6 points from the previous month. If the report exceeded market expectations, confidence in the US economic growth will be strengthened, increasing the ability to raise interest rates as early as in the first quarter / 2016 of the Fed, pushing the dollar go up and cause damage Trade to gold.

TECHNICAL ANALYSIS

Technical Analysis

Currently, at 15:33 GMT + 7, gold is trading at $ 1,054.33 / ounce, up 0.38% to compared with the opening price $ 1,050.76 / ounce.

Yesterday, gold was closing at its lowest level since 10/2009. Observe the chart H1 can see opening the Asian session, the rise of the gold price adjustment lasted 3 candles in a row, down 23.6 interfere at $ 1.055 / ounce. Then gold has retreated deep in two consecutive candles and mixed in the past candles around 23.6 block. Predicting the end of Europe, the US session will enable prices to rise again, proceed to block 38.2 in $ 1.060 / ounce.

Tools TREND signal SIGNAL MuaEA sold yesterday, is helping us to earn 121 points. Today Signal Indicator continues to sell out.

PSYCHOLOGICAL ANALYSIS

Psychological Analysis

The market today has escaped pressure from the Fed meeting. Prospects for the greenback rose after raising interest rates likely to take the market buy dollar positions, temporarily leaving the precious metal.

Observe the H1 chart in technical analysis tells us that there are 4 candles down from 6 candles rose, on average shorter trunk reduce average candle body candle showed increased buying pressure than selling pressure remains strong . Prices were mixed in the last hour of trading shows that markets still determine the direction of gold prices in the context of short-term, dollar price increase reduces the appeal of the precious metal, but in the long term , inflation will cause gold becomes a safe haven. In the future, the gold price will be volatile by economic data as well as speculation about the timing of the next rate hike by the Fed.

RISK

Risk
The Fed raised interest rates make dollar becomes more attractive investment channels in the eyes of investors due to a higher interest rate, while investment in gold to more risky can only eat profit because the price difference is not in the interest rate over the holding period. In its meeting of 15-16 / 12, the FOMC is expected to raise interest rates by 4 times in 2016 showed that dollar could still rise next year, dragging precious metal plummeted.
Besides, the report PMI manufacturing sector exceeded market expectations, confidence in the US economic growth will be strengthened, increasing the ability to raise interest rates as early as in the first quarter / 2016 of the Federal Reserve, The dollar pushed upward and cause injury to gold.
If gold falls, the price could go back to the lowest level recorded in yesterday at $ 1,047.69 / ounce.

Market commentary

Today, gold may continue to rise if confidence in US inflation strengthened. The decision to raise interest rates by the Federal Reserve shows that the global economy is growing well enough to help the central bank confident action and a roadmap towards the next rate hike. This suggests that inflation is likely to come back and support the gold price goes up. Predictions can turn up the $ 1.070 / ounce.

However, as discussed in the Risk, gold prices may continue to decline for the second consecutive session, plunged into the threshold $ 1,045 / ounce.

Analyses of Group If24h

Linh Nhan