To The Moon

If you make statistics on the price trend of gold futures in the past ten years, you will be surprised to find a rule: at the end of each year. When other risky assets are smashed, there will always be a short-term increase in gold, Because it is against the whole trend and usually lasts for a short time, it is easy to be ignored by everyone.

This rule was discovered by Xu Yaxin, @许亚鑫 a big coffee in our community, and made a chart statistics. The result is as follows:

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Review: The market is frightened, but gold is still expected to break through the short-term market​

However, this gold market at the end of this year has made people lose their temper. Until now, gold is still doing repeated oscillation in an awkward flag-shaped box, and its amplitude is shrinking recently.​​

​Let's discuss this time whether the uptrend of gold can still appear.

At present. Most of the bad news of gold has already landed, but the good news has been delayed. According to this view, gold maybe still have a small make-up market.

The biggest bad news has landed

Of course, the biggest negative for gold is the Fed's expectation of turning eagles, raising interest rates and shrinking debts. As we analyzed last month, the news of raising interest rates in the first half of this year and ending debt shrinkage in March should have been fulfilled. For this reason, gold has been greatly retraced, and the expectation of rising interest rates has been priced in gold.Moreover, the hawkish expectation of gold should be to raise interest rates in March this year.

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​As can be seen from the bitmap last time, 12 voting officials in the Fed are in favor of raising interest rates for the first time in March this year, accounting for the majority of the Fed's population. Therefore, unless the Fed unexpectedly raises interest rates earlier than this month or February, which is almost impossible, it is difficult for gold to make a sharp collapse in the future for a long time.

However, this does not mean that the unilateral rise of gold is about to begin. We should know that on the weekly chart, gold still maintains a strict reverse movement relationship with the 10-year US debt interest rate, and high interest rate is still the main factor to suppress the rise of gold in the near future.​​

​However, the interest rate trend of US debt in the past 10 years is likely to continue to rise in the near future, which is not only caused by the high inflation data, but also catalyzed by the taper process that has already started, so the gold market is in an embarrassing situation of suppression at the top and backing at the bottom.

​$10年美债主连 2203(ZNmain)$​

What are the advantages of gold?

Where does the power of this bottom come from? Still coming from inflation data,As we all know, apart from the bond market, gold is the first choice to hedge and preserve its value. When the inflation data soared to a high level of more than 30 years, gold became the best investment against soaring prices and declining purchasing power.

Especially when prices keep rising, but economic growth is not exerting its strength, the United States is now in a stage where CPI is rising at a high speed, but GDP is difficult to maintain the previous growth rate. This stage is usually called stagflation stage.

This stagflation expectation is also one of the important factors to support the gold price.

In addition, there is the Biden administration's fiscal stimulus policy, and the previous 3B bill is still waiting to be promoted. If this bill comes into effect, commodities may pick up once, which is likely to ignite the rising market of gold. As our previous analysis, due to the postponement of the 3B Act, Xiaoyangchun, which should have had a gold market, was also extinguished conveniently.

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​So is it possible for gold to rise slightly?​​

​I don't think being late means being late. Patience may be the only thing we can do at present.

This week, there are more risk events that may become the fuse of gold:

For example, the Federal Reserve released the minutes of the meeting, in addition to which two Fed officials delivered speeches. Any signal that hawks are insufficient or tend to doves will become the driving force for gold to go up:

-St. Louis Fed Chairman Brad (who has the right to vote this year) delivered a speech on US economic and monetary policy.

-San Francisco Fed Chairman Daley delivered a speech on monetary policy at American Economic Society.

In addition, there are extremely important US non-farm payrolls data to be released this Friday. If the data falls unexpectedly, it is also likely to prompt the Fed to relax the taper process.

We'll see.

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