Unexpected outbreak of gold, a prelude to inflation
The most difficult situation in financial markets is that the news does not match the market, or the market price suddenly riots, and you can't find any news that can explain it.
Last week's gold market was a similar situation. There is suspense but not much in the Fed's interest rate cut, which is not enough to support the rapid upward movement of gold price (there is nothing wrong with rising more or less, but the speed is really unexpected).
For gold prices, an unproven,However, the logic that may conform to the current market reason is that there are funds that think that the gold reserves stored in the United States are not enough to cope with the delivery in the financial market, that is, the forced market in futures terminology.
Although this possibility is very rare, once there are clues, it is possible to make the market rush for gold, so the market should follow, and don't gamble in reverse easily.
As I said before, gold will choose the trend direction in March, but now it is clear that the market has chosen the up direction. Because there is no exact news and the growth rate is high, we are chasing bulls at this stage.Will definitely face the risk of large fluctuations. This is not to say that the price of gold will fall, but the rapid withdrawal on the way up is not a fluctuation that all accounts can bear, so everyone should be prepared for a roller coaster in the future.
Technically, the fluctuation of gold price last week is close to the rising rate in August 2020. In the past, when this rising rate appeared, it usually rose for three weeks, followed by the rise in the week of March 1.
Last Friday, gold price has risen for two weeks continuously. If it continues to rise this week, the probability of weekly pullback/retracement will be higher next week, so friends who want to catch the top can have a good look at the trend this week. In addition, you can pay attention to an index called divergence rate, which is usually of little use, but in extremely fast market, it has the probability of catching reversal, so friends who want to make profits or short and do backhand can try and make mistakes according to this index.
Finally, friends who don't get on the bus don't be afraid of not having a chance. Gold is the leading indicator of financial market conditions (representing the easing direction of the Federal Reserve), which usually leads other commodities. Its rise means that other commodities will rise one after another, so it is a more important task to lay out other commodities in the future. Of course, silver has not risen a lot yet, and it is still the key opportunity for us to observe. At present, the price of silver is still below the trend line, and there is no sign of breakthrough. However, driven by the increase of gold, the recent bottom of silver has been made clear. Therefore, it is still a good choice to stop losses around the low points in February-March and hold some silver positions for a long time. The key is not to increase positions quickly, so as not to fluctuate too much and lead to unstable positions.
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