2016.2.5 Special comment: Crazy buying of gold ETFs promotes the resurgence of the bull market
Zhao Xiangbin
The Spring Festival is undoubtedly the most anticipated festival for the Chinese people. This holiday always carries the joys and sorrows of countless families; during the Spring Festival holiday, we return to family love and search for the soul. Comfort and hope allow the injured soul to be compensated and rested. The trend of the financial market does not seem to have returned to silence. The trends of various types have both climaxes and crises. Compared with the quietness of the Christmas holidays in Europe and the United States, our holiday atmosphere is still famous for its liveliness.
Gold has successfully broken through the two marks of US$1,130 and US$1,150, leading the precious metals to collectively break through and find the largest increase. This is a rare and powerful increase since falling below the support of the bull market in 2013. Oil prices also benefited from the sharp fall in the US dollar and rebounded sharply. The low of $20 seems to be drifting away, leaving endless regrets for short sellers. The biggest failure in the foreign exchange market is the repeated back and forth between the US dollar and the Japanese yen.
Next, when the United States is about to release January non-farm employment data tonight, how will the gold, silver and oil exchanges interpret their exciting trends or will they become dull? I think the price rise driven by the crazy buying of gold ETFs will be unsustainable. Tonight may be the end of the feast, but this does not affect the bullish performance of gold and silver. The bull market is far from coming.
1. Crazy buying of gold ETFs creates the foundation for the gold and silver bull market?
The current rise in gold and silver has triggered a collective upward trend in precious metals. The main supporting factor is not only the holding behavior of ETFs, but also many factors that are beneficial to gold and silver.
First of all, looking at the holdings of the world's largest gold ETF-SPDR, the latest data is 693.62095 tons announced on February 4; the increase in holdings in the past two days has reached as much as 8 tons; this is very rare for ETFs in the past 8 years. The performance of radical increase in positions is also a trend of increasing holdings by more than 7% from the eight-year low of 630 tons in 2015.
Secondly, the increase in holdings by the Central Bank of China has played a very important fundamental supporting factor; in January 2015, it was still 33.89 million ounces, and it began to increase its holdings to 53.32 million ounces in June 2015, and then increased its holdings every month until December. It has reached 56.66 million ounces; it can be seen that the later accumulation of holdings has formed an absolutely important basic support for the price of gold and silver. This is the key to the rebound of gold and silver to above US$1,150 today.
Thirdly, during the European Central Bank’s interest rate meeting in January, Draghi said that the scale of easing is expected to be expanded in March, Bank of Japan Governor Haruhiko Kuroda said about devaluation, and the sharp decline and weakness in U.S. economic data are all from the United States and Europe to Japan. The current economic situation has caused deep concern in the market. This factor has now merged into a wave of risk aversion, supporting the rebound trend of gold and silver.
Fourth, the upcoming Chinese Spring Festival is still the peak season for physical purchases. The low prices of gold and silver relative to previous years have given a huge boost to consumption. The surge in physical consumption has once again evoked good memories for bulls; it is expected that China and Asia will successively Going into the Spring Festival holiday will bring more purchases.
Fifth, gold and silver's breakthrough of key resistance triggered more buying orders. Market follow-up funds continued to enter the gold and silver market driven by the sharp decline in the stock market, the unclear prospects for real estate investment, and the weak economic trend. According to the latest data analysis from Reuters GFMS, price hedging of gold mining companies rose by 9% in the third quarter of 2015, reversing the decline in the second quarter of 2015; Reuters said that this rebound "is overwhelmingly concentrated in forwards" Expansion of Sales,” noting that mining companies are selling later production at current prices.
Sixth, what needs attention is that the premium of Shanghai TD gold price to the global benchmark gold price narrowed and fell to close to zero. However, the price of Chinese gold still rose by 1.2% yesterday, achieving the highest gold price since October 2015. Technical trends see gold prices moving above the 200-day moving average, and technical buying will continue to drive prices higher.
The above factors indicate that gold and silver constitute a good basic support for the bull rebound. The crazy buying of ETFs and the increase in holdings of the Central Bank of China have jointly promoted the price trend of gold and silver. Whether this rising wave can continue depends on the U.S. economic data tonight. Good or bad performance determines.
2. Is the rebound in Africa and the United States due to the decline of the US dollar?
With the support of many good fundamentals, the U.S. Index not only did not rise, but was beaten down by short sellers. The trend at the beginning of February was obviously not a good start for the U.S. dollar. The U.S. Index turned from a top of 99.83 points to a decline, 2 It once fell to 96.26 points on March 4th, and many important supports fell one after another with no support.
The weakness of the US dollar is mainly due to the weak trend of key economic data. On top of the lackluster economic data released in January, the ADP private employment data released in February fell sharply, and the number of initial jobless claims increased sharply to 285,000; durable goods and factory orders continued to fall, while manufacturing data stopped short of previous data and did not add any color.
If weak economic data is the basic support, then the Fed’s ambiguous policies and statements on raising interest rates are undoubtedly the biggest driver of this wave of shorts. Perhaps the United States does not want the U.S. dollar to appreciate too quickly; in maintaining the strength of the U.S. dollar and the U.S. dollar The Fed is walking a tightrope between the exchange rate and the rapid appreciation of the U.S. dollar. Any remarks about the failure of the U.S. dollar are worthy of vigilance.
Judging from the current trend, the U.S. dollar is indeed weak, but we do not underestimate the potential power of any rebound. Behind the weakness of the U.S. dollar will be a strategic conspiracy, and perhaps a greater rebound is still behind it. Because it only takes a few periods of good data and comments from Federal Reserve officials about raising interest rates to turn the market's nerves back to being bullish on the U.S. dollar. This is too easy, especially for investors in China who are following the trend.
3. Although non-US currencies have rebounded, spring is still far away
Judging from the trend of non-US currencies, the market has gradually returned to a binary structure. The fall of the US dollar has caused a collective rebound of non-US currencies. Although the RMB set off a third force in January wave, but due to the arrival of the Spring Festival, the binary structure of the foreign exchange market is still effective.
The euro will undoubtedly stabilize the bottom at 1.045 points. The latest test was completed in November and December of 2015. It stabilized in January and has completed the bottoming trend in February. To explore the rise of the euro, you don’t need to look at the fundamentals of Europe. Just a slight fall in the US dollar is enough to support the rise of the euro.
The pound/dollar exchange rate does not have such a clear trend as the euro. The pound, which once led the plummeting of non-US currencies in the foreign exchange market, became the hero of the short fall. Starting in July 2015, the pound completed a wave market from 2014 to 2015. , which is unique among many currencies in the foreign exchange market; most currencies fluctuated sideways in 2015, which is not appropriate for the pound. The current stabilization will require more adjustments to form a bottom. This is the biggest difference between the pound and the euro.
If there are many currencies that have benefited from the decline in the US dollar exchange rate and have risen, there is certainly no shadow of the Australian dollar. The Australian dollar is still struggling at the bottom. Although it retreated to around 0.68250 points in January, the current rebound is still in the form of a bottom adjustment. Unless the current trend can break through the resistance of 0.7370 points, it will be affected by the weakening of the Chinese economy and the fundamentals of bulk commodities. The weakening of commodities is still in the form of a decline.
The exchange rate of the Japanese yen is the most interesting thing for us to ponder. It has fallen back to around 116.6 points, which is already near the low point in January 2015. It will not be easy for the end point to return to the starting point of the Japanese yen this year; the Japanese yen exchange rate cannot depreciate and Bank of Japan Governor Haruhiko Kuroda sees the contradiction between appreciation and is anxious in his heart. Even though last week's massive intervention caused the exchange rate to fall sharply to 121 points against the US dollar, it was of no avail. Last night, the exchange rate appreciated again to around 116.8 points. The trend of falling short gives us important inspiration and investment opportunities.
The most worthy and valuable currency for investors is the trend of the US dollar/Canadian dollar. The biggest dark horse currency in the current foreign exchange market is the Canadian dollar; at this stage, I think only the Canadian dollar has this characteristic. If commodities stabilize and rebound and oil prices begin to rise, a weakening U.S. dollar will create huge appreciation potential for the Canadian dollar.
From my point of view, the exchange rate of RMB will only depreciate without appreciation. The current depreciation has aroused the indignation of the Chinese people and the excitement of the media. I think it is unnecessary.Is appreciation in line with our interests? The greatest role of diplomacy is to use high-sounding reasons to say shameless things. Can't we see that foreigners use such methods? I don’t think so. China’s financial market and enterprises do not rely on RMB appreciation to support our status as a major country. Devaluation is also a strategy and strategy.
4. Has crude oil rebound kept bears away from $20?
The price of U.S. New York crude oil shot up and fell back on February 4, finally closing at around $31.7. It continued to fluctuate at the current position early on Friday morning; did the oil price rebound because of rumors of production cuts?
Judging from the current fundamental factors, there is still no change in the sluggish demand and sufficient supply. We cannot get all the real information about oil price fluctuations from the U.S. EIA data, and there is no amplification in terms of transactions. Therefore, it can be said that any rebound in oil prices will be temporary, and repeated shock consolidation and backtesting of low support will be the norm.
27.56 I think is not the end of the current price. If it falls below the support of $30, the position of $25 or even below is still clearly visible. Judging from the trend of crude oil short-selling funds, it is still near the high level. If it breaks through the high level near 240 again, it will rise further. Oil prices are far from getting rid of the weak fate.
5. How do various varieties respond to the impact of U.S. non-agricultural data in January
First of all, the current trend of gold and silver is around 1155 and 14.8 US dollars. The good non-agricultural data released by the United States tonight for January will have an impact on the current trend and lead to a decline. ; If gold and silver fall back below the support of 1150 and 14.8 US dollars, it will see around 1130 US dollars and 14.6 US dollars.
If the U.S. non-agricultural data in January does not reach near the previous level, it will support the continued upward rebound of gold and silver. The position can be seen at 1168-80 US dollars and 15.3 US dollars.
Secondly, regarding the trend of the U.S. dollar, if the U.S. non-agricultural data in January exceeds the previous value, it will support the U.S. index to stabilize around 96 and start a rebound. The rebound high is expected to regain 97 or even 98 points; otherwise, unsatisfactory data will lead to a retracement test of 95. Points of critical support. According to the technical trend of
, the US index will retrace to the lower track of the fluctuation range in 2016. The lowest support of this line is near 92 points, but it is expected that the support will be near the 95.5 point line based on the above trend line.
Third, if the U.S. employment data is good, the exchange rate of the euro/dollar will fall back to test the critical 1.104 point. On the contrary, if the U.S. data is not as good as expected, it will continue to support the rise, but the range is limited and is expected to be around 1.12 points.
Fourth, the weekly exchange rate of GBP/USD has formed a bullish K-line combination. The sharp increase in U.S. data in time will have little impact on the exchange rate of GBP. If it retreats to 1.45 points, if it can stabilize, the upward trend will remain unchanged; on the contrary, Even if the US data is not good, the rise of the pound will be limited, and it is expected to break through the resistance of the 10-week moving average and test the high of 1.4650 points.
Fifth, the exchange rate of the Australian dollar/US dollar has a tendency to continue to rebound. If the US economic data improves, it will end the rebound trend of the Australian dollar. There is a high probability that the current high level will be blocked and the support will retrace 0.7 points again; vice versa; , if the data is bad, it will support testing the interval resistance of 0.735 points.
Sixth, the performance of U.S. economic data exceeds expectations and previous values, which will cause the yen to rebound from the current level of around 116.7 points, with a maximum rebound to around 118.7 points. Otherwise, if the U.S. economic data is bad, the exchange rate will continue to fall below 115 points. On the downside; this may undermine the trend since early 2015.
Seventh, the correlation between the price of crude oil and the US dollar is not very high recently, but the impact is obviously still there; if the US non-agricultural data performs well in January, it will cause the current oil price to drop from US$31.7 to around US$28-29. . On the contrary, poor U.S. economic data has little support for oil prices, and the rebound high is around $33-34.
Based on the above analysis, the rebound trend of gold and silver, driven by the increase in ETF holdings, is by no means the starting point of the bull market. It should be the mid- to late-stage trend of the band market rising; on the contrary, any long-term follow-up ideas at the current price are not Be cautious, the risk of bullish buying is far greater than buying the bottom out of fear. Successful investment behavior is "good losses" and "small losses"; the rest is the profit band.
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