Under the influence of Russia-Ukraine conflict, gold went up strongly last week. Although it has not refreshed the high level in November last year, the triangular shape that has been hovering for a long time has been broken. This may mean that the directional/trend market we expect has started. Under many uncertainties in 2022, gold is still an indispensable part of everyone's portfolio.
For a long time, we have been firm long-term bulls in gold. Although the long-short trend was obvious last year, and there were some negative news from time to time, the technical graphs based on weekly and monthly levels still suggested that the gold rally was not over.
From the perspective of fundamentals and news, the blow brought by the Fed's interest rate hike has become smaller and smaller. The market has absorbed this influence in the previous adjustment, and from the trend of US bond yield, the correlation between gold and monetary policy has changed at the beginning of last year. In other words, raising interest rates does not mean falling gold.
From the news point of view, gold, a traditional safe-haven asset, is an obvious beneficiary in geopolitics and conflicts. Traditionally, there is a saying that "when a gun goes off, gold is two thousand". Although it is exaggerated, there is no better and safer choice at present, and buying gold is the first reaction of most people and the market.
At this level, we expect a similar outbreak in 2022. With the adjustment of global central bank's monetary policy, the redistribution of interests between countries has become the general trend. Under the condition of maximizing benefits, conflicts are inevitable. Therefore, gold will continue to become a winner because of this tension.
Back to the market itself, gold bulls have taken the first step at present, but there may be 1-2 links/obstacles to be solved before "take-off". The 1880 level covers the high level at the end of last year and the rebound suppression at the beginning of last year. The hold-up and technical selling are expected to affect the upward momentum. Need a new stimulus, or enough to change hands, before you have a chance to stand firm in the above position. Then came the 1920 high in June last year, which was also the key to opening the 2000 mark.
Compared with gold, silver lags behind slightly. Although it has rebounded by more than 10% from the low price platform, the current price is still in the downward channel since August last year. As we said before, in the unilateral market of precious metals, the rise and fall of silver should be greater than that of gold. Therefore, silver is an important reference for observing and verifying gold. As long as it is maintained above the floor price near 21, there is no big trend reversal of gold and silver.
For investors who have not kept up with the long pace of the 1750 mid-line before, they can pay due attention to the trading opportunities on the internal and external markets at this time. Under the template of Russia-Ukraine conflict, it is not difficult to find that the currencies of topic countries are prone to large fluctuations. Based on this logic, and the G2's irreconcilable status quo, it is feasible to bet on internal and external trading opportunities brought by exchange rate fluctuations.
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