Vang SJC

The precious metal has fallen to below its 50-day moving average as dropping more than 1% yesterday (24/8) to the close price of $1323.62/oz – also the low price. On Thursday, gold is still hovering around this area.

GOLD D1

Fig. GOLD D1 Technical Chart

Since last Friday, gold price has followed a relatively strong downbeat. It is due to the rising expectation of a US rate hike in near-term, which was hinted by several policy makers.

On August 18th, Federal Reserve Bank (FED) released its minutes for the July meeting. It showed that there was a divided stance among FED’s members on when should the benchmark rates be increased. This dragged down the greenback to a fresh low since the historical Friday – June 24th. However, after the minutes, several FED officials’ commentaries have contributed to push the US dollar up as continuously adding positive signals of possibilities of rate hikes in the upcoming meetings.

Tomorrow, Janet Yellen – FED Chairwoman – is scheduled to have a talk on current and future monetary policies at an annual meeting of central bank in Jackson Hole, Wyoming. She now is awaited to provide some clues and statements regarding the timing of the next rate hike. Counting on economic data, the FED President – who actually have a dovish stance on policies, is likely to unveil clearer timing of raising US interest rates if some key data economy released prior to her speech can add more optimisms on a strong growth in the largest economy.

Yellen_data_dependent_cartoon_11.18.2015_large

Early US trading session on Thursday, the total value of new purchase orders of long-lasting goods in the past month will be published by the Census Bureau, with an expectation of a 3.4% change in comparison with a reading of minus 3.9% in June. The core durable goods orders are anticipated to increase by 0.4%, revising from a 0.4 decline in the preceding month. Unemployment claims in the US may pose at 265,000 in the week ending on August 19th, a little higher than the previous period. One day after, the prelim GDP Price Index in the second quarter of this year will be out with data likely coming in at the equal level of annualized change as in the quarter to March 2016.

The odds of another rate hike in September meeting currently is at 21%, and 25.9% for the meeting in November, according to CME Group’s FED watch.

Despite of being a safe-haven asset, the yellow metal just is considered as a holding non-yielding one. Hence, possibilities of increasing US rates may lead the investors rush their cash flow into the greenback – the first choice as usual. And as a result, gold price may face the danger of being less attractive.

By the meanwhile, there are some ideas that several biggest drivers of gold rally in this year is starting to lose their steam as investment flows have begun to flash warning signals that gold may enter slowdown period.

The world’s central banks – who often buy gold to diversify their reserves – is likely to being descending purchases since the beginning of this year. As reported by Macquarie analysts, in the first half of 2016, central banks registered a net purchase of 144 tonnes as buying about 166 tonnes and selling 22 tonnes of gold. The figure was not much changed as in 2013 and 2014 but well below the reading of 179 in the same period of last year.

gold h4

Fig. GOLD H4 Technical Chart

GOLD is on track to fall down far from the two-year high of 1374.83 and dropped below the MA 100, indicating that the bearish momentum is quite powerful. RSI (14) is lingering around the level of 30 – the oversold threshold, contributing the sellers’ overwhelming. The price is forecast to move sideways for a while before continuing skidding.

gold h1

Fig. GOLD H1 Technical Chart

On the hourly chart, a gradual down channel is forming on the price action, combining with the two MAs lying over. The PFM signal trend indicator has encouraged shorts on this commodity since yesterday, with about 134 pips accumulated. The price may go down as low as 1315.89.

Analyses of Group Fiinvesting

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