Positive news on vaccines, but EU export restrictions may disrupt the market. Tight liquidity continues to suppress gold prices.
In addition, according to the monitoring data of the world's eight major gold ETFs on the gold information website www.24K99.com, as of January 29, 2021, the total holdings of the world's eight major gold ETFs were 1995.222 tons, a decrease of 5.254 tons from the previous trading day. Future outlook: Daniel Briesemann, an analyst at Commerzbank, said that the Fed's Wednesday meeting had no positive impact on gold prices, as the dollar strengthened before and after the meeting, as other concerns in the financial market led to the dollar being seen as a safe-haven currency.
Time:
2021-01-31 08:44
International Spot Gold Rebounded nearly 40 from its low on Friday (January 29) US dollars reaching a high of $1875.66 per ounce, but the gains were later reduced, and it returned to a narrow range of $1850 to $1860. The Federal Reserve maintained near-zero interest rates while keeping the bond-buying program unchanged, which will continue to put pressure on the dollar. However, the liquidity concerns triggered by the sharp drop in the stock market supported the rise of the dollar, which gold price brought pressure. Currently, there is still a global shortage of vaccines , leading to slower-than-planned vaccination rates, which provides some support for gold prices.
The pandemic is still a key factor affecting the overall global investment sentiment. Two more US pharmaceutical companies announced vaccine data today. Novavax's COVID-19 vaccine showed 90% effectiveness in large-scale trials in the UK. Johnson & Johnson became the fifth pharmaceutical company to announce successful vaccine development. However, Johnson & Johnson's stock price fell after the announcement, as the efficacy was lower than expected, especially compared to Moderna and Pfizer vaccines with over 90% efficacy. However, the Guardian reported that the fifth vaccine produced by Johnson & Johnson has shown efficacy against the novel coronavirus and only requires a single dose, which could change the outlook for the UK and the rest of the world.
It is reported that the EU intends to announce a policy to restrict vaccine exports today. To strengthen the EU's control over vaccine supply, European Council President Charles Michel proposed using new legal powers and "enforcement measures" to increase vaccine production and address "serious difficulties" in the supply of certain products. This may affect the global vaccine distribution situation, causing widespread market concern.
CMC Markets 'Chief Market Analyst Michael Hewson explained: "The worrying issue is that as the prospect of EU export controls on vaccine supplies intensifies, the rollout of vaccines may slow down and vaccine supplies may be disrupted."
On the other hand, the market is still focusing on the battle between bulls and bears in the US stock market surrounding GameStop stock. The latest news is that Citron Research, a previous short-seller of GameStop, announced that it would stop short-selling research and focus on long opportunities. Analysts pointed out that this battle may lead to permanent changes in the behavior of hedge funds and the retail industry, but such events may be phenomenal individual events and are not enough to drive the market itself.
Driven by such sentiment, silver market also experienced significant fluctuations. Analysts pointed out that new funds have entered the silver market. They pointed out that there may be increasing interest from short-term traders from platforms such as Reddit. trading members. For example, a post on Reddit's Wall Street Bets (WSB) reads: "The world's biggest short squeeze, silver will rise from $25 to $1000."
Technically, MarketPulse said that gold prices tested the support level near $1830.00 several times this week, with resistance near $1865.00, but neither was broken. This may tell us that staying patient is the wisest strategy at the moment.
In addition, according to the monitoring data of the world's eight major gold ETFs by the gold information website www.24K99.com, as of January 29, 2021, the total holdings of the world's eight major gold ETFs were 1995.222 tons, a decrease of 5.254 tons from the previous trading day.
Future Outlook:
Commerzbank analyst Daniel Briesemann said that the Fed's Wednesday meeting had no positive impact on gold prices, as the dollar strengthened before and after the meeting, because financial market's other concerns led to the dollar being seen as a safe-haven currency, which suppressed gold prices.
Bob Haberkorn, senior market strategist at RJO Futures, said: "The $1.9 trillion (US economic stimulus plan) is quite large, and I don't think President Biden will get support for passing this plan. This is another reason why gold prices haven't tried to return to $1900 per ounce."
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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.