Everbright Futures 0424 Gold Market Review: Data and Geopolitics Intertwined, Gold Price Remains Weak and Volatile
Overnight, COMEX gold prices fluctuated and weakened, falling about 1% throughout the day based on the closing price. After today’s opening, global gold prices mainly fluctuated, with bulls and bears fiercely contesting key positions.
On the data front, for the week ending April 18, U.S. initial jobless claims came in at 214,000, higher than the market expectation of 210,000 and the previous value of 207,000, indicating some pressure in the labor market. Meanwhile, the U.S. April Composite PMI initial reading rose to 52, hitting a three-month high; the Services PMI climbed back to 51.3, returning to expansion territory; and the Manufacturing PMI surged to 54, marking a nearly four-year high. However, some institutions noted that this improvement was mainly driven by “inventory accumulation out of concerns about supply adequacy and rising prices.” The increase in both goods and services prices reached the highest since July 2022, indicating inflationary pressures are mounting. The combined pressures of intensifying inflation and the employment market may put the Federal Reserve in a dilemma.
On the geopolitical front, U.S.-Iran negotiations have once again “reached a stalemate.” Trump has ordered the sinking of any ship laying mines in the Strait of Hormuz, and made it clear that without U.S. Navy approval, no ship can enter or leave the strait, which is now “completely sealed off” until Iran agrees to a deal. Overall, the conflict between the U.S. and Iran has disrupted shipping in the Strait of Hormuz. High oil prices fueling inflation expectations and the resulting expectation of tighter policy from the Federal Reserve remain the main factors suppressing gold prices. Until there is greater clarity on geopolitical negotiations, traders are advised to control their positions and wait for confirmation of direction. Given that all sides currently still prefer solving the conflict through negotiations, one can also consider allocating during dips amid fluctuations.
Source: Everbright Futures Research Institute
Author: Yao Tao
Professional qualification: F3082336
Trading advisory qualification: Z0018553
Editor: Zhu Henan
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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