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Gold Continues to Rebound, OPEC Production Reduction Remains in Suspense
March 09 2020 08:40:45Hu Yongrun(Linda)

The Federal Reserve on Tuesday (March 3) announced an emergency interest rate cut, reducing the benchmark interest rate by 50 basis points, saying that the fundamentals of the U.S. economy are still strong, but the health incident has brought sustained risks to economic activity. The U.S. stock market was volatile on that day, and the U.S. dollar index also hit a new low in nearly two months. However, loose monetary policy was a major positive for gold prices, with gold up 51 U.S. dollars on that day, reaching a peak of 1,649 U.S. dollars per ounce.

So far, gold has shown a stop decline and recovery. In the long run, the fundamentals of gold prices are still strong, the risk aversion attribute is particularly prominent, and the overall long-term trend remains unchanged. At the same time, this week's U.S. stock market did not continue last week's short market, and stopped falling and rebounding like gold, which to some extent limited the rise of gold price.

Gold daily level, U-shaped reversal at the bottom, the price was above the 5, 10, 20 day average, but the 5, 10 day average cross dead fork. Four hour level, gold began to rise from 4 p.m., and it was up to $10 in the day, with the price near 1,550 and above the 5, 10 and 20 day average. The hourly level has fluctuated the market as a whole. After the bottom rebounds, it was blocked. It is expected that there will not be too much market fluctuation before the non-agricultural data is released. In the evening, the price should fall again, but it is not recommended to short and wait for more low opportunities to operate.

On February 24, 2020, gold jumped to a new high of 1,689. After the short position fell, at the 4-hour level, we can clearly see that gold has been suppressed by the upper boundary 1,657 of the window. We should pay attention to the breakthrough of this pressure level in the near future.

The US February non farm payrolls report would be released at 21:30 on March 6. At present, the market expects that the non farm payrolls will increase by 175,000 in February. According to the comments of the Federal Reserve this week, the non farm data on Friday should be optimistic, but Hu Yongrun does not expect that it will have a great impact on the overall trend of gold.

The 178th (special) plenary meeting and ministerial meeting of the organization of petroleum exporting countries will be held in Vienna, the capital of Austria. Oil producing countries will discuss production plans for the next stage. Affected by public health events, energy demand is bleak, and international oil prices have plummeted more than 10% for the second consecutive month this year. At present, investors have high expectations for OPEC production reduction.

U.S. crude oil closed on Monday, forming a bullish and engulfed pattern, but the market did not continue, the oil price continued to fall, the market is still weak, it is recommended to hold the currency to wait and see in the past two days, and pay attention to the guidance of basic information on the market.

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