In early Asian trading on Wednesday (January 19), gold fluctuated slightly between 1811.6 and 1814.9, and is now reported at 1812.8 per ounce. Looking back on yesterday’s market, the price of gold began to fluctuate and fell from around 1822 in the Asian-European session on Tuesday. It fell rapidly to the first line of 1805.6 during the session, and then quickly rose in the US session, and finally closed at 1813.5 per ounce, closing on the daily line.

Fundamentally, due to the high inflation pressure in the United States, the market expected that the Fed will raise interest rates four times in 2022, and the first interest rate hike will be carried out as early as March to deal with inflation. Affected by the Fed’s interest rate hike expectations, the yield on the 10-year U.S. Treasury bond soared to a near two-year high of 1.888%. Benefiting from the rise in U.S. bonds, the dollar index remained strong and gold prices were under pressure. At present, the factors supporting the rise of gold are inflation, the pandemic, and geopolitics, and inflationary pressure is the key factor. If inflation remains relatively high, it is unlikely that the price of gold will fall sharply in the short term.

Technically, gold is on the daily cycle, the market is close to the Bollinger Mid-band, and the KD indicator is dead cross downward. If the price of gold falls below the support of the middle track, there is a chance to test the lower track of the Bollinger Band around 1789. In the 4-hour cycle, pay attention to the first-line support of 1808 and the suppression situation near yesterday’s rebound high of 1820. The market tends to be weak and fluctuated. Pay attention to the support of 1808/1800. It is recommended to go short on rallies.

Resistance position: 1820/1826/1831

Support position: 1808/1803/1798

Investment Advice:

Short around 1818-1820, stop loss at 1824, target profit at 1810/1805/1800.

Analyzed by: Mr.Chris Lau, Independent Analyst