Vang SJC

Yesterday (28/1), the gold price slid as the US unemployment claims fall down, proving the firm job growth. The price moved between $1,111.40 and $1,125.65/oz, before setting at $1,115/oz down 0.89% from the open price $1,125.36/oz.


Fundamental Analysis

Today, the Bank of Japan (BOJ) has surprised investors by adopting the negative interest rates policy to spur banks to lend more in the face of the weakening economy. This move has boost a rally in the dollar and the inflation in the Asia’s second largest economy, following the European Central Bank (ECB) indication of more stimulus as soon as March. The easing policy combined with the recovery of oil price has supported the global equity market when the Asia stocks close in the positive territory and major indices finished in green as well. The Japanese interest rates below zero has blown away the haven demand, and in turn lowers the price of the precious metals.

The three successive days of gains in oil, fueled by hopes of reduced production from oil producers in response to the current glut has lifted the oil price into around $33/barrel, which leads to the general rally in the stock market.

Traders are looking for clues on how the mixed growth scenario will influence the Federal Reserve’s pace of the U.S interest-rate increases. The Federal Reserve on Wednesday (27/1) acknowledged the slowdown in economy growth but also noted that “labor market conditions improved further.”  The job numbers continue to show very impressive data as the unemployment claims last week fell by 16,000 to 278,000. Investors weigh a robust US jobs market against the sluggish global economies which may drag on the US growth. The tightening policy is still marking a question which raises bets on the rate hike in the near term, and support the dollar, also put a strain on the gold price as higher rates will reduce the appeal of precious metals, which don’t pay interest or offer returns.

The consumer spending, which accounts for more than 2/3 of U.S. economic activity, is forecast to have increased at around a 1.7%. Moreover, the consumer sentiment reported by the University of Michigan later is supposed to be as high as 93.1, which will reinforce the Fed decision in raising interest rate, as result, hurt the demand for the safe haven assets such as gold.

The US gross domestic product (GDP) released and in the spotlight today probably rises at a 0.8% annually as a strong dollar and flat global demand hurt exports, and the falling oil prices continued to undercut investment by energy firms. Furthermore, the data has been predicted by many economists before and is likely to reflect in the previous sessions in the gold market.


Technical Analysis

Currently, at 16:13 pm, GMT+7, the gold price is trading at $1,112.32/oz, down 0.18%, compared with the open price at $1,114.22/oz.

The Fibonacci retracement showing that the gold price is trading between the level 38.2% at $1,114/oz and the level 60.0% at $1,110/oz, approaching the below level 60.0% as comes the weekend, the buying positions are likely to rise. The level 38.2% has become a strong resistance every hour in today’s trading. The red candle with long shadow was in the time BOJ announced the negative interest rate, which navigated the cash flow into other assets such as stocks. The price is expected to poise for a further fall, touching the price of $1,1109/oz.

Deriving from the RSI (14) index, the indicator gets 43 points, the trend was up to 50 points during the previous hours then went down poising for the 40 points, indicating the selling expectations.

Taking a look at chart H1, the bears power is outweighing the bulls one with decline accounts for +2.62 while the increase get negative figurr at -0.76. The movement of the gold price is between the below band and the average band according to the Bollinger Band. The price of the yellow metals is under the MA 20 of the Bollinger Band and is expected to get below and find it hard to break up the MA band.

On the chart, ADX (14) index reaches 17.9 points, pointing out there is no trend at all. The -DI cut +DI and get over the green DI, indicating the selling signals appearing more.


Sentiment Analysis

On the chart H1, the red and green candles are now quite the same, with long shadow for both. The centre attaction is the data for fourth quarter GDP in the US trading, which will turn the “up” mode on for the yellow metals as concern about the low GDP due to US weak export and the inventory cut.

Also, the sentiment for the market is to take advantage of the high prices during the week to gain some profits in the weekend.

The rebounce of the equites market, especially Nikkei index and S&P 500, has calmed and encouraged investors to invest in more risky assets to gain profit.

Much as the data of GDP is a leading indicator revealing about the overall US economic health, the data has been forecast before and any release will not take a profound effect on market sentiment.

The stimulus trend all over the world which will support for the weakening global growth is still a factor to spur the market confidence into the stock market, and calm the concern.



Citing weakness in the global economy and sluggish inflation, the FOMC decided to hold its benchmark Federal Funds Rate at its current range between 0.25 and 0.50%. The Fed’s comments reassured investors that the pace of rate increases may slow if market tumult continues.Notably, the FOMC removed a phrase that it is “reasonably confident” that inflation will move toward its 2% objective from the statement. The prospects of a hike rate seem less likely in the next meeting and even the first quarter due to the low inflation. The slower path in the tightening policy will give gold a further boost. Not to mention,  factory orders for business equipment fell in December and the spillover from China and Europe fell short of expectation as China’s economic slowdown sparked turmoil across global markets and boosted demand for gold as a haven. 

Sofer economic data such as Chicago PMI and the GDP deflator published today will be a positive news for the precious metals.

Market Commentary

Today, the gold price may fall as the selling positions are surpassing the buying ones for the weekend gains. Given that case, the price is likely to go down as $1,100/oz.

However, as mentioned in the Risk sector, the price may go up as high as $1,125/oz.

Analyses of Group Fiinvesting


Linh Nhan