GOLD: Chinese Trade Balance and Western Inflation
Metals this month have seen a meteoric rise of 5.78% since April 2 when gold's long-term range broke to the upside and has continued to do so throughout the fortnight. Since the Asian opening, gold has experienced a 0.92% growth. As we have said, gold, silver, copper and platinum have experienced a quite pronounced growth in their upward demand. The trade war between the Euro-US vs. Sino-Russian axis has been going on since 2021, but now Europe is realizing its lack of control over the production and processing of rare materials. This kind of hammering by President Von der Legen coupled with inflation data on both sides of the Atlantic is pushing all metals positive, with gold leading the way, but with silver considerably stronger than it is usually portrayed relative to gold in its moves as the second classic reserve asset. This upward movement is also being represented in Brent and WestTexas oil as well as other hydrocarbon derivatives such as heating oil and gasoline, but not Gas by comparison. The truth is that the results of the US consumer data have shown a severe increase in inflation, so gold already began to respond with this movement at the beginning of the Asian market and today made a bullish continuation figure.
Today, Friday, we will face harmonized inflation data from several Eurozone countries, trade balances from the UK and China and consumer sentiment from Michigan which can clearly indicate in which direction gold can move. It is important to know that China continues to buy gold like never before since 2014, and already in 2023 closed the year with more than 375 metric tons acquired and having a total of 2000 tons at the end of the year, about 10% of what the global mining of this asset, of which it is the largest importer at the moment, represents. Its average import is 1,060 tons, close to 20% of the world demand in the last five years.
That is why it is important to observe the Chinese trade balance and its structure, to see where the Asian giant is putting its eye, since it has been structuring its entire production chain based on the acquisition of raw materials for its factories for a long time now. It is important to know that gold is one of the most important components for technological production.
If we look at the chart at the moment the RSI is very clearly oversold at 74.23% giving signs of possible fall, so it is possible that the price makes a strong correction to the average of its previous channel. If we look at the trading range of highs and lows the highs are at $2,400.50 and its low is at $2,156.97. Its price bell at this moment is similar to a triple bell, being the zone of the most traded checkpoint at $2,174.86. It would not be unusual for the price to return to its current trading zone at $2,348.05 as it is currently overbought and there is a lot of "hype" on all commodities.
Ion Jauregui - AT Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Today, Friday, we will face harmonized inflation data from several Eurozone countries, trade balances from the UK and China and consumer sentiment from Michigan which can clearly indicate in which direction gold can move. It is important to know that China continues to buy gold like never before since 2014, and already in 2023 closed the year with more than 375 metric tons acquired and having a total of 2000 tons at the end of the year, about 10% of what the global mining of this asset, of which it is the largest importer at the moment, represents. Its average import is 1,060 tons, close to 20% of the world demand in the last five years.
That is why it is important to observe the Chinese trade balance and its structure, to see where the Asian giant is putting its eye, since it has been structuring its entire production chain based on the acquisition of raw materials for its factories for a long time now. It is important to know that gold is one of the most important components for technological production.
If we look at the chart at the moment the RSI is very clearly oversold at 74.23% giving signs of possible fall, so it is possible that the price makes a strong correction to the average of its previous channel. If we look at the trading range of highs and lows the highs are at $2,400.50 and its low is at $2,156.97. Its price bell at this moment is similar to a triple bell, being the zone of the most traded checkpoint at $2,174.86. It would not be unusual for the price to return to its current trading zone at $2,348.05 as it is currently overbought and there is a lot of "hype" on all commodities.
Ion Jauregui - AT Analyst
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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