Weekly Gold Review: The market is complex, but there is a hidden main line that the bulls are secretly happy about. The situation between India and China is precarious, and gold may break out and soar after a breakthrough.
Although the US dollar rose for the second consecutive week, gold prices still closed higher, ending near the 1940 level. However, the fluctuation range was only $60, and the volatility over the past four weeks has gradually narrowed. This may suggest that once the current consolidation range is broken, gold prices may experience a breakout. At the same time, considering the rising inflationary pressure putting pressure on negative real yields, this creates solid support for gold, and this situation has also increased the optimism of market bulls, believing that gold is expected to break free after recent fluctuations and further rise.
Time:
2020-09-13 14:33
September 7-11 Overview: Although the US dollar rose for the second consecutive week, gold prices still rose, eventually closing near the 1940 level. However, the volatility range was only $60, and the volatility in the past four weeks has gradually narrowed. This may suggest that once the current consolidation range is broken, gold prices may experience a breakout. At the same time, considering that rising inflationary pressures are putting pressure on negative real yields, this provides gold with solid support, and this situation has also increased the optimism of market bulls, believing that gold is expected to break free after recent fluctuations and further rise.
Meanwhile, the recent market situation has been ever-changing, but the Sino-US political confrontation is likely to maintain its current situation at least until the US election. This has laid a main line in the complex market, and it is believed that it will also become a solid support for the decline in gold prices, giving bulls the confidence to re-enter the market and attack higher levels.
Spot gold opened this week at $1930.12 per ounce, reached a high of $1966.20 per ounce, a low of $1906.24 per ounce, and finally closed at $1939.42 per ounce, up $6.12, or 0.32%.
Technically speaking, bearish traders may wait for a convincing break below the $1910-05 support level, which could fall back to the August monthly low near $1863. A sustained rally breaking above the 1970 level (50% Fibonacci level and downtrend line) would be seen as a new trigger for bullish traders.
Adrian Day, president and CEO of Adrian Day Asset Management, said: "Gold prices have been very resilient in resisting pullbacks, rebounding from the support level and 50-day moving average that have been maintained since the decline in early August."
Important News of the Week:
India-China Corps Commander Talks Remain Fruitless, Indian Media: Indian Mountain Warfare Troops Have Sounded the Highest Alert
As the corps commander-level talks failed to make a breakthrough, it has been agreed by all parties to hold a meeting of army commanders for future dialogue. So far, five army-level meetings have been held between China and India.
The two countries decided to hold a sixth round of high-level military talks in the coming days. Lieutenant General Harinder Singh, commander of India's 14th Army Corps, and Major General Liu Lin, commander of the South Xinjiang Military Region, have not met since August 2.
A senior government official said that trust between the two armies has completely broken down. China has mobilized thousands of soldiers, tanks and howitzers, and the two sides are very close in the Pangong Tso-Chushul area.
Seeing the movement of the People's Liberation Army troops and artillery, the Indian army has also deployed similar weapons in the Spanggur Gap. The two countries' "troops and guns are within range," a government official said.
In addition, sources said that China has deployed militia forces to "consolidate the border" and "stabilize the Tibet region." Their task is to try to drive Indian troops from tactical high ground.
According to a recent report by India Today, Indian troops with expertise in high-altitude combat have been deployed to the front lines in the so-called "Ladakh region." India Today quoted sources as saying that Indian troops have increased troops and defenses in the past few days, enhancing military strength on the south and north banks of Pangong Tso.
The report quoted an Indian official as saying that India is currently maintaining a "highest alert" status. Another official said, "A small spark could lead to a loss of control."
Trump Announces Peace Deal Between Palestine and Israel, Geopolitical Risks Eased
US President Trump announced that Bahrain has agreed to normalize relations with Israel, marking another diplomatic victory for Trump after a similar agreement with the United Arab Emirates last month. According to a joint statement issued by the United States, Bahrain and Israel, they agreed to "establish full diplomatic relations between Israel and the Kingdom of Bahrain." The statement noted that Bahrain, Israel and the UAE will attend a signing ceremony at the White House next Tuesday, where they will sign a "historic peace declaration."
With the mediation of the United States, the UAE and Israel also reached a similar agreement last month.
Friday's statement said that Bahrain also accepted Trump's invitation to attend a signing ceremony at the White House next Tuesday with Israel and the UAE, where they will sign a "historic peace declaration."
A week ago, Trump oversaw Serbia and Kosovo signing an agreement to normalize their economic relations.
This arrangement also includes Kosovo recognizing Israel, and Serbia agreeing to move its embassy to Jerusalem—as the United States did with its embassy in 2017.
Brexit Risks Continue to Rise, UK and Japan Reach Trade Agreement to Provide an Exit Strategy
Although the risk of a no-deal Brexit is escalating, news today said that the UK and Japan have reached a trade agreement, its first major post-Brexit trade deal, boosting market sentiment. The Financial Times commented that the agreement came at the right time for British Prime Minister Johnson, as negotiations between the UK and the EU are deadlocked, and the deadline for the two sides to reach an agreement is approaching. At the same time, trade talks between the UK and the US have been temporarily shelved, and the UK government has refused to grant unrestricted access to US agricultural products.
Market Outlook ：
This week, 15 Wall Street professionals participated in Kitco's latest survey. Among the participants, five professionals (36%) expect gold prices to rise; three analysts (21%) expect gold prices to fall, and another six analysts (43%) are neutral on gold.
At the same time, retail investor confidence rose to its highest level in a month. A total of 1359 people participated in the online survey. Of these, 926 respondents (68%) expect gold prices to rise next week. Another 205 people (15%) said they expect gold prices to fall, and 228 people (17%) are neutral.
Many analysts said they have a neutral view on gold due to the dollar regaining momentum. US Dollar Index closed this week above the key psychological level of around 93.
Related News
Gold prices continue to fluctuate.
Gold prices have shown a volatile pattern in the short term, affected by the weakening of the US dollar and changes in sentiment due to easing geopolitical tensions.
Gold prices rise again! Multiple risks fuel safe-haven demand.
From the perspective of the international market, the tense situation in the Middle East, the escalation of the Russia-Ukraine conflict, and the continued high uncertainty surrounding the US Trump administration's tariff policies have driven up gold prices due to increased risk aversion in the market. Furthermore, a significant recent change in the gold market is that gold has become the second-largest reserve asset for central banks globally. How should the future trend of gold prices be viewed? Several analysts have indicated that in the short term, gold prices may fluctuate due to factors such as tariff easing and sudden changes in the geopolitical situation; in the medium to long term, gold prices are still in an upward channel.
As the Russia-Ukraine conflict enters its third year, global attention is once again focused on this geopolitical crisis. According to Dow Jones Newswires, US President Donald Trump made startling remarks at the White House on Thursday (June 5), stating that neither Russia nor Ukraine is prepared for peace, and that both sides may "continue fighting" until one side is willing to compromise. This statement not only signals the failure of his attempts to broker peace, but also introduces new uncertainty to the global geopolitical and economic markets.
Recently, good news came from the China Machinery Metallurgy and Building Materials Workers' Technical Association. In the 2025 National Machinery Metallurgy and Building Materials Industry Workers' Technological Innovation Achievement Award, Shandong Guoda Gold Co., Ltd.'s "Purification of Crude Arsenic Flue Dust to Produce Arsenic Trioxide Industrial Application" and "Key Technology Application for High-Value Utilization of Complex Copper-Gold Ore Resources" projects won the first prize and the second prize respectively. This honor is a high recognition of the workers' technological innovation ability and the effectiveness of achievement transformation, and also fully demonstrates the company's outstanding strength in the industry.
Gold prices return to $3300! Wall Street banks show significant divergence in long-term outlook
In fact, as gold prices fluctuate, Wall Street's major banks have recently shown a clear divergence in their views on gold prices. Unlike Goldman Sachs and Deutsche Bank, which are optimistic about gold's performance, Citigroup believes that the long-term outlook for gold prices is not optimistic.
Although gold prices rose this week, market volatility has clearly increased. While the US-UK agreement is symbolic, its content is limited and insufficient to alleviate concerns about a global economic slowdown. Therefore, gold prices will continue to fluctuate between safe havens and policy signals, closely monitoring the Federal Reserve's interest rate expectations and global trade sentiment.