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Major data releases ahead! Could GDP and PCE trigger market volatility?
NANHUA FUTURES
joined discussion · Apr 8 11:03

Gold & Silver: Two-week ceasefire among the US, Israel, and Iran triggers strong rebound in gold and silver

(I) Reasons for the unusual movement: A phase of easing in the US-Iran conflict, a rebound in expectations for interest rate cuts from the Fed's monetary policy supporting investment demand, and a decline in the US dollar and Treasury yields boosting precious metal valuations.
1. Regarding the US-Israel-Iran conflict, Trump stated his agreement to pause bombings and attacks on Iran for two weeks, with significant progress made toward finalizing a long-term peace agreement with Iran; White House officials mentioned that Israel has also agreed to a temporary ceasefire; Iran announced it reached a two-week ceasefire agreement under special conditions with the US and Israel, stating that the Strait of Hormuz will be safe for passage in the coming two weeks.
2. Regarding the Federal Reserve, Vice Chair Jefferson believes that employment faces downside risks, while inflation faces upside risks.
3. In terms of central bank gold purchases, China has increased its gold reserves for the 17th consecutive month. In March, the People's Bank of China purchased nearly 5 tons of gold, accelerating from an average monthly purchase of around 1 ton since last quarter, reinforcing support through central bank gold buying.
(II) Outlook: Strategically bullish on precious metals in the medium to long term. The medium-term trend will primarily hinge on the pace of the Fed’s monetary policy; a delay in interest rate cuts won’t alter price direction but will affect the pace. Short-term caution is advised due to potential pullback pressures amid geopolitical uncertainties, with continued focus on the two-week ceasefire negotiation window. Key data to watch includes Friday night's US March CPI figures, with oil prices surging in March amid Middle Eastern tensions. Additionally, closely monitor statements by Fed officials ahead of the April 30 rate decision meeting.
(III) Strategy-wise, we continue to view pullbacks as opportunities to accumulate long positions in the medium to long term. In the short term, amid geopolitical uncertainties, a range-trading strategy of buying low and selling high can be considered. For London Gold, key support levels are at 4800, 4700, then 4550, with resistance at 49000, then 5000. For London Silver, support lies at 74, then 70, with near-term resistance in the 76-77 region, followed by the 79-80 zone.
Author: Xia Yingying, Head of Precious Metals and New Energy Research Group, Nanhua Futures
(I) Reasons for the unusual movement: A phase of easing in the US-Iran conflict, a rebound in expectations for interest rate cuts from the Fed's monetary policy supporting investment demand, and a decline in the US dollar and Treasury yields boosting precious metal valuations. 1. Regarding the US-Israel-Iran conflict, Trump stated his agreement to pause bombings and attacks on Iran for two weeks, with significant progress made toward finalizing a long-term peace agreement with Iran; White House officials mentioned that Israel has also agreed to a temporary ceasefire; Iran announced it reached a two-week ceasefire agreement under special conditions with the US and Israel, stating that the Strait of Hormuz will be safe for passage in the coming two weeks. 2. On the Federal Reserve side, Vice Chair Jefferson believes employment faces downside risks while inflation faces upside risks. 3. In terms of central bank gold purchases, China has increased its gold reserves for the 17th consecutive month. In March, China's central bank purchased nearly 5 tons of gold, accelerating its pace, having averaged around 1 ton per month since last quarter, reinforcing the support of central bank gold buying. (II) Outlook: Maintain a strategically bullish view on precious metals over the medium to long term. The mid-term focus remains on the rhythm of the Fed’s monetary policy—while delayed interest rate cuts won't change the price direction, they may influence the pace. In the short term, caution is needed regarding potential pullbacks amid recurring geopolitical tensions; continue monitoring negotiations during the two-week ceasefire window. Key upcoming data include Friday night’s US March CPI figures, as oil prices surged in March amid Middle East conflicts; additionally, closely watch speeches by Fed officials ahead of the FOMC meeting on April 30. (III) Strategy-wise, we continue to view any pullback as an opportunity to accumulate long positions over the medium to long term...
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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