empty
28.08.2024 11:18 AM
Gold Will Shed Weight

Nothing lasts forever. Any trend needs a correction. Gold consumption in China's jewelry industry fell 27% in the first half of 2024, as the biggest problem became the rise in prices to record peaks with almost no pullbacks. Total demand for the precious metal fell by 5.6% to 523.8 tons. Where there is a void, the West is gradually replacing the East, but this does not mean a correction in XAU/USD won't happen.

Federal Reserve Chair Jerome Powell's fiery speech at Jackson Hole about the imminent start of monetary easing by the US central bank allowed gold to set a new record, but then a natural process of selling on facts began. The XAU/USD quotes already account for the Fed's varying pace of rate cuts compared to other central banks, so the ideal environment for the precious metal may deteriorate. We are talking about the dollar's weakness and falling US Treasury bond yields.

This combination allowed asset managers to increase their net long positions in gold to the highest levels in four years. Holdings of the world's largest specialized exchange-traded fund, SPDR Gold Shares, have been rising for eight consecutive weeks, the longest period of capital inflow since mid-2020.

Gold Dynamics and ETF Holdings

This image is no longer relevant

However, excessive speculative longs may become a thorn in gold's side. Their unwinding at the first sign of trouble could lead to quotes declining below the $2500 per ounce mark. Especially since the market increasingly realizes that the Fed's anticipated scale of monetary easing, as implied by derivatives, is clearly overstated. A 100 basis point cut in the federal funds rate in 2024 could still be explained by a recession. However, how can there be a recession when US consumer confidence soars to a six-month high?

Yes, in 2023 and the first half of 2024, the precious metal made gains even amidst a rising dollar and increasing US Treasury yields. Back then, it was supported by active purchases from central banks and strong demand from Asia, led by China. But now, with gold in Shanghai trading at a discount to London, relying on this support no longer makes sense.

Dynamics of American Consumer Confidence

This image is no longer relevant

The US dollar can capitalize on the uncertainty surrounding the US presidential election and geopolitics. The situation in the Middle East remains tense, and the USD index may rise due to increased demand for safe-haven assets.

This image is no longer relevant

At the same time, the long-term outlook for the precious metal remains bullish. By the end of 2025, the federal funds rate could fall to 3.5% amid a slowdown in the US economy. Demand in China is expected to recover gradually, and ETF holdings will increase.

Technically, on the daily chart of gold, the combination of the Three Indians and 1-2-3 patterns increases the risk of a correction. If the bulls fail to push quotes above $2515 per ounce, the risks of a continued decline will increase. It makes sense to hold shorts formed from this level.

Seleccione el marco de tiempo
5
min
15
min
30
min
1
hora
4
horas
1
día
1
s.
Gana con los cambios en el valor de las criptomonedas con InstaForex.
Descarga MetaTrader 4 y abre tu primera operación.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    UNIRSE AL CONCURSO

Recommended Stories

Los mercados atrapados en un círculo vicioso sin salida por ahora (posible caída del Bitcoin y del precio del oro)

Los mercados están en estado de confusión debido a la enorme cantidad de noticias negativas que se ciernen sobre ellos sin un final claro a la vista. En este contexto

Pati Gani 11:13 2025-03-20 UTC+2

Análisis del par GBP/USD. El 17 de marzo. El mercado se ha dormido, la economía no le interesa a nadie.

El par de divisas GBP/USD el viernes "murió" definitivamente. En la ilustración a continuación se puede ver claramente que la volatilidad fue bastante alta en los primeros tres días

Paolo Greco 07:03 2025-03-17 UTC+2

Análisis del par EUR/USD. 17 de marzo. Ni rastro de corrección.

El par de divisas EUR/USD no logró continuar el débil movimiento a la baja del miércoles y jueves durante la jornada del viernes. Por lo tanto, una corrección contra

Paolo Greco 07:02 2025-03-17 UTC+2

El Bitcoin huye de la criptocapital del mundo

Donald Trump prometió hacer de América la criptocapital del mundo, pero ¿quién necesita una capital de la que todos huyen? Las peores liquidaciones de empresas tecnológicas desde 2022 entristecieron

Marek Petkovich 12:02 2025-03-11 UTC+2

WTI – West Texas Intermediate. La recuperación de los precios del petróleo está limitada

Hoy, el petróleo ha intentado recuperarse desde los niveles más bajos observados desde septiembre de 2024. Sin embargo, la recuperación no puede considerarse positiva en el corto plazo. Los inversores

Irina Yanina 10:55 2025-03-11 UTC+2

Las negociaciones entre EE. UU. y China sobre comercio están estancadas

Según informes de los medios, las negociaciones entre EE. UU. y China sobre comercio y otros asuntos se han estancado en niveles bajos, ya que ambas partes no logran entenderse

Jakub Novak 07:59 2025-03-11 UTC+2

El gas sigue subiendo rápidamente de precio

Las cotizaciones del gas se han consolidado de manera firme por encima del nivel de $4, y en este momento no hay razones para el regreso del mercado bajista

Miroslaw Bawulski 13:07 2025-03-10 UTC+2

Análisis del par GBP/USD. El 10 de marzo. La libra esterlina sigue subiendo.

El par de divisas GBP/USD reanudó su movimiento alcista el viernes. El paquete estadístico estadounidense no fue lo suficientemente fuerte, lo que completó el cuadro general del desastre del dólar

Paolo Greco 07:29 2025-03-10 UTC+2
¿No puede hablar ahora mismo?
Ingrese su pregunta en el chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.