Analysis of gold news: In the US market on Tuesday (December 19), the price of gold was trading around US$2,029 per ounce. Since Powell’s speech, the market has digested expectations for the Federal Reserve to cut interest rates. On Monday, Fed officials spoke separately, with San Francisco Fed President Mary Daly saying that a rate cut in 2024 may be appropriate; three rate cuts in 2024 may be needed. Fed Mester said that market expectations for interest rate cuts are slightly ahead of the Fed. Chicago Fed President Goolsby said the Fed should not act based on market reaction. New York Fed President John Williams dismissed the idea that the central bank is already considering cutting interest rates and left the door open to further tightening of monetary policy if necessary. Later, Atlanta Fed President and CEO Raphael Bostic sided with his colleagues and postponed the option of cutting rates until the second half of 2024. Since the U.S. dollar weakened sharply last week, the U.S. dollar has experienced sharp fluctuations against many currencies, highlighting the safe-haven function of gold. Some analysts believe that gold will usher in strong seasonal tailwinds in the next six weeks. With the Fed turning dovish and the dollar falling, gold has fundamental support. Also note that the Bank of Japan rate decision is less than 12 hours away, which may be a factor.
Today’s gold strategy: It is recommended to focus on low and long callbacks, supplemented by rebounds from high altitudes. At the top, focus on the 2050 first-line resistance, and on the bottom, focus on the 2023 first-line support.
Analysis of crude oil news: In the U.S. market on Tuesday (December 19), crude oil prices were trading around $72.90 per barrel, as investors digested the Federal Reserve’s complex information on the prospect of interest rate cuts in 2024, and U.S. Treasury yields rose on Monday. Oil prices rose on supply concerns. On the crude supply front, oil prices climbed after Iran-backed Houthi rebels stepped up attacks on ships in the Red Sea, raising concerns about supply disruptions. Oil giant BP said it had temporarily halted shipping on the route, and other shipping lines said they would avoid the route. About 15% of global shipping traffic transits through the Suez Canal, the shortest route between Europe and Asia. London’s marine insurance market expanded the high-risk area of the Red Sea on Monday, with premiums paid by ships jumping ninefold. Some analysts said that the rise in geopolitical risk premium has played an indisputable role in the recovery of oil prices. But ample oil supplies limited gains in oil prices on Monday. Investors celebrated dovish comments from Federal Reserve Chairman Jerome Powell on Wednesday and Thursday, when Fed officials’ interest rate forecasts showed an average expectation of a rate cut in 2024 of three-quarters of a percentage point. Bets on the Fed turning to easing began to face resistance on Friday, with some traders believing that the recent comments were an attempt to curb an overly enthusiastic reaction to expectations of easing. “They want to keep it a mystery,” said Tom Di Galoma, managing director and co-head of global rates trading at BTIG in New York. He added: I think the Fed is completely screwed and there will be many reasons for the Fed to cut interest rates by mid-year. He noted that the economy “will slow significantly in 2024.” The economic slowdown will significantly reduce the demand for crude oil prices and limit the room for crude oil to rise further.
Today’s crude oil strategy: It is recommended to focus on rebounding from high altitudes, supplemented by callbacks to lows. The top should focus on the first-line resistance of 75.5, and the bottom should focus on the first-line support of 72.6.
The operation of gold and crude oil trading must be done carefully, the above strategies are recommended only for reference.
