Impact of U.S. Data on Gold Price Fluctuations
On Tuesday, the dollar index experienced a slight rebound due to the vow to impose tariffs on Canada and Mexico, ultimately closing up by 0.06% at 106.90. The yield on the benchmark 10-year U.S. Treasury bond settled at 4.3100%, while the yield on the more interest-rate sensitive 2-year Treasury bond came in at 4.2580%. The three major U.S. stock indices rose collectively, with the Dow Jones and S&P 500 reaching new historical highs. By the end of trading, the Dow Jones Industrial Average climbed 123.74 points from the previous day, closing at 44,860.31 points, a gain of 0.28%; the S&P 500 increased by 34.26 points, closing at 6,021.63 points, a rise of 0.57%; and the Nasdaq Composite rose 119.46 points, finishing at 19,174.30 points, up by 0.63%.
Risk Warning for Wednesday
☆ 21:30, Initial claims for unemployment insurance in the U.S. for the week ending November 23 will be released.
☆ 21:30, Revised annualized quarterly change (%) for Q3 GDP in the U.S.
☆ 21:30, Preliminary monthly change (%) in durable goods orders for October in the U.S.
☆ 23:00, Annual rate (%) of the PCE price index for October in the U.S.
☆ 23:30, Weekly EIA crude oil inventory, Oklahoma's Cushing crude oil inventory, and strategic petroleum reserve inventory as of November 22 in the U.S.
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The ceasefire agreement reached between Israel and Lebanon has alleviated the market's risk aversion in the short term, but it has not fundamentally eased the overall geopolitical risk. While the ceasefire has fostered some optimistic sentiments, concerns remain regarding its potential implications.
The government's tariff policy has also introduced uncertainty into the gold market. However, the inflation risks arising from this may constrain the Federal Reserve's capacity for rate cuts, thereby exerting pressure on gold prices.
The minutes from the Federal Reserve's meeting on November 6-7 indicated that officials are divided over future rate-cutting actions but are united in their view that clear guidance on the direction of monetary policy should be avoided. The minutes noted that many officials expressed concerns over the uncertainty surrounding the neutral interest rate level, making future rate-cutting decisions complex. Market expectations for a 25 basis point rate cut at the December meeting have increased, with CME Group data indicating that the probability of a cut has risen to 62.8%.
Despite the bolstered expectations for rate cuts, concerns over tariffs and the federal deficit continue to influence investors' views on Federal Reserve policy. Worries regarding tariffs and fiscal deficits may shape market perceptions of the Fed's ability to cut rates.
Recent economic data has suggested that the U.S. economy remains solid. Data from the Federal Housing Finance Agency shows robust growth in single-family home prices in September, and the consumer confidence index has reached a 16-month high. These figures have, to some extent, supported the strong performance of the dollar.
On Tuesday, the dollar index initially rose by 0.63% to 107.55 due to tariff threats, but it ultimately regained all its gains, closing near 106.88. This scenario provided some upward space for gold prices.
① The tariff plans of the new U.S. president and ongoing conflicts have created some support for gold.
② The Federal Reserve's meeting minutes reflect a divergence in officials' future views, providing some support for gold.
③ Gold has broken through the downward trend line resistance area on the hourly chart, indicating strengthening at that level.
④ The data on U.S. Q3 GDP revisions, October durable goods orders, and the PCE price index to be released tonight will significantly impact the gold market.
In summary, the focus today should be on short-term pullbacks with a bias toward buying gold.
The ceasefire agreement between Israel and Hezbollah marks an important easing since the Gaza conflict last year. Although the agreement has reduced tensions in the Middle East and mitigated the risk of oil supply disruptions, concerns regarding future developments persist, and investors should closely monitor the situation.
While the ceasefire has lowered the risk premium associated with oil prices, it does not signify a complete resolution of geopolitical risks. Israeli Prime Minister Netanyahu has stated that the ceasefire will allow Israel to focus on threats from Iran, suggesting that future changes may still impact oil prices.
OPEC+ will hold a meeting this Sunday to discuss future production policies. According to sources, member countries are deliberating on further delaying the planned increase in production set to commence in January 2024. OPEC+ accounts for about half of global oil production, and a slowdown in global demand along with increased production from non-OPEC+ countries has affected this plan. Analysts predict that OPEC+ may decide to maintain the current reduction policy during the meeting in response to market uncertainties.
OPEC+'s decisions will have a direct impact on oil prices. If they decide to extend the production cuts, oil prices may find support; conversely, if they opt for increased production, it could exacerbate supply-demand imbalances, leading to a decline in oil prices.
The latest data from the American Petroleum Institute (API) indicates a decrease of 5.94 million barrels in U.S. crude oil inventories last week, while product inventories increased. Originally, a decrease of around 600,000 barrels was expected, and the significant drop in actual data may reflect a rebound in market demand. However, the rise in product inventories suggests that, despite the drop in crude inventories, uncertainty still exists regarding the demand for refined products.
Investors should pay attention to the upcoming EIA inventory data for a more comprehensive understanding of market supply and demand. Changes in inventory data will directly influence market expectations for future oil price trends.
Plans to impose a 25% import duty on crude oil from Canada and Mexico have garnered significant market attention. It has been indicated that the policy will not grant exemptions for crude oil imports, with warnings that it may lead to rising oil prices, especially for the Midwest regions of the U.S. that rely on Canadian crude oil.
Data from the U.S. Department of Energy indicates that Canada and Mexico are major suppliers of crude oil to the U.S., accounting for one-quarter of the total refined oil processed by U.S. refineries. Imposing tariffs on these two countries may increase the costs for U.S. refineries, further driving up fuel prices. Both the American Petroleum Institute and major industry organizations have stated that imposing tariffs would be a mistake and could harm consumers and national security.
① OPEC+ will hold a meeting this Sunday and may consider extending the production cut policy, providing some support for oil prices.
② The latest data from the American Petroleum Institute (API) indicates a rebound in current crude oil market demand.
③ The U.S. plans to impose a 25% import duty on crude oil from Canada and Mexico.
④ The decline in crude oil prices yesterday did not break through key support levels.
⑤ The upcoming release of EIA data on crude oil will have a significant impact on price trends.
In summary, a bullish stance on crude oil is preferred today.
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