Durable gold prices for durable goods orders fell by a thousand, and the oil market also watched OPEC "performance"

Huitong.com November 23rd - Wednesday (November 23) Spot gold fell below the $1,200 mark. The US October durable goods orders in the evening showed good performance. The US dollar index continued to rise and refreshed 13 years and a half to 101.62. The price of gold was under pressure, while the dollar against the yen rose to a seven-and-a-half-month high to 112.08; international oil prices also weakened slightly, US oil once fell more than 1% to 47.45 US dollars / barrel, in addition to the dollar's strength, the market has not been eliminated Investors are waiting for OPEC's further performance in questioning production cuts.



[U.S. durable goods orders show the best performance in a year, the dollar soared gold prices hit a nine-month low]

The US durable goods orders released on Wednesday night were brilliant, the best performance in a year. The US dollar index rose to a high of 101.62, hitting a 13-and-a-half-year high. The price of gold fell sharply and fell for 14 dollars in the short-term. It fell below the $1200 mark and refreshed the new low of nine months to $1188.96 per ounce; non-US currencies also generally weakened.


(Dollar Chart Daily Chart)

(Spot gold daily chart)

Specific data showed that US durable goods orders increased by 4.8% in October, the best performance since October 2015, far better than expected and the previous value, expected to increase by 1.5%, the previous value is less than 0.3%.

Reuters comment pointed out that the monthly rate of durable goods orders was significantly better than expected, mainly driven by the demand for new orders from the manufacturing industry, including demand for transportation equipment orders surged by 12%, and orders for aircraft parts also rose by 4.8%. The great positive factor means that the US economy has started to perform well in the fourth quarter.

Huitong.com believes that for gold, the low of $1,190 on February 16 has not been completely broken. It is impossible to rule out the possibility that the price of gold will rise again above $1,200. If the day is able to recover the integer mark of $1, the price of gold will remain low. Conversely, if the price of gold effectively falls below the support of the $1,190 mark, the price of gold will still be significantly weaker, and the mid-line does not rule out the possibility of further testing the $1,100 mark.


(Gold ETF - List of changes in SPDR positions)

It is worth reminding that the current gold market has become more pessimistic, from the gold ETF positions can be seen.

Data show that the world's largest gold exchange-traded fund (ETF) - SPDR Gold Trust Tuesday (November 22) gold holdings fell 0.42% to 904.91 tons, for nine consecutive trading days, and positions for more than five months New low.

In addition, according to Huitong.com, Trump's election to the US president has stimulated safe-haven buying of physical gold in the European market, but investors who are accustomed to holding gold in the US have not made a move this time. After all, many of them are optimistic after voting for Trump, which is not good for gold.

Investors in both markets reacted differently to Trump's victory, showing that their assessment of risk is quite different. Outside the United States, Trump pledged to renegotiate trade agreements and international relations, stimulating defensive gold buying; while US investors are more likely to sell gold and move to the bond market.

Tarek Saab, chief executive and co-founder of Texas Precious Metals, said that precious metals investors in the US saw Trump as a good thing, so there was no such big panic. Sales of Texas Precious Metals in November were less than in October before the election. 20%.

In the foreign exchange market, due to the strengthening of the US dollar, non-US currencies generally weakened, the euro against the US dollar once closed a nearly one-year low to 1.0541; the pound against the dollar rose to a two-day low to 1.2361; the dollar against the yen rose sharply, once refreshed seven From a semi-month high to 112.45, from a technical point of view, the USD/JPY market is expected to rise to near the 115 mark (the mid-line of the Bollinger Band) and focus on the resistance of the March 2016 high of 114.57.


(USD/JPY daily chart)

The Canadian Imperial Bank of Commerce (CIBC) believes that although the Bank of Japan’s purchase of bonds through a fixed-rate method for 1-3 year and 3-5 year periods may result in no debt to buy, this indicates that the Bank of Japan is trying to limit the front-end yield. Mobile, where the 10-year Treasury yield returned to the 0% target threshold for the first time in two months. If the US-led yield curve continues to steepen, this will further increase the dollar's ability to move against the yen.

Huitong.com believes that the current USD/JPY is still relatively strong, but the upside momentum is depleted.

[Production cuts waiting for next week's meeting, oil prices may fall into range volatility]

On Wednesday, international oil prices weakened slightly. US crude oil futures fell more than 1% to US$47.40/barrel in January. Brent crude oil futures hit a low of US$48.56/barrel in January. The strength of the US dollar also put pressure on oil prices, and Iraq The attitude of other countries has made the market still full of doubts about the reduction of production. The short-term upside momentum of oil prices has weakened. The specific results still need to wait for next week's OPEC meeting. The oil price will be short-term or into a range shock. Under the US oil, attention will be paid to the support near 46.55. The resistance of the dollar integer mark.


(US crude oil January futures daily chart)

(Brent crude oil January futures daily chart)

Three OPEC sources attending the technical meeting said that the oil ministers meeting on November 30 will discuss specific production cuts, which are expected to cut 1.2 million barrels per day, which is the market's expected reduction in production.

The key obstacles to the current production restriction agreement are the attitudes of Iraq and Iran, both of which hope to receive a production cut exemption, in which Iran hopes to continue to increase production to restore production to pre-economic sanctions levels; Libya and Nigeria also require exemptions

The Iraqi Ministry of Oil also issued a statement saying that it will make recommendations at the OPEC Ministerial Meeting later this month. The meeting aimed to implement implementation details of the cuts in crude oil supply to push up the oil price agreement, but hinted that Iraq will not contribute to any production cuts.

Jabar Ali al-Luaibi said in a statement that Iraq’s "legitimate claims should not constitute an obstacle to the new frozen production agreement, and Iraq" will propose new ideas and proposals to bring the member states closer to reaching an agreement. ”

Tushar Tarun Bansal, Ivy's global energy director, believes that the current capacity cap may limit the capacity of each member of OPEC for a long time, and that Iraq will hope to achieve higher capacity standards and pave the way for the future in the long run.

According to Huitong.com, if countries such as Libya, Nigeria, Iraq and Iran are all exempted from production cuts, the final implementation of the OPEC production-limitation agreement depends entirely on whether Saudi Arabia and its Gulf allies are willing to bear the burden of reducing production alone.

According to sources, there are indications that Saudi Arabia and its Gulf allies are ready to cut production by up to 1 million barrels per day. Saudi Arabia needs to bear a reduction of production quota of 500,000 barrels per day.

Nomura Securities analyst Gordon Kwan believes that OPEC has a 70% chance of a 1 million barrel/day reduction in production at the November 30 meeting in Vienna. If OPEC announces a cut in production, oil prices may rise by more than $2 in the weeks following the Vienna meeting; the noise of oil production negotiations is often misunderstood by many people who misinterpret the negotiating skills as signs of a breakdown in negotiations; Fear of losing market trust, causing oil prices to fall further to around $40.

Huitong.com believes that the larger possibility is that before the OPEC meeting next week, oil prices will still fluctuate and rise. The top of the US oil is concerned with the resistance around 49.20. The 50-dollar mark is a further resistance. In the short-term, the US oil still falls back to The risk is around $46.55, but if the barrier support is effective, the oil price will continue to rise higher; however, if the 46.55 mark falls, the risk of a sharp drop in oil prices will increase.

In addition, it is worth reminding that the US EIA crude oil inventory data has a greater impact on short-term oil prices, investors need to pay attention. The US crude oil drilling data, which was scheduled to be released every Saturday morning, was released in the early morning of the US Thanksgiving Day to Thursday morning (November 24). The previous data showed that the US crude oil drilling data has risen for 22 weeks in the past 24 weeks and has now rebounded. Up to 9 months high.