On January 28, the overnight London spot gold price surged significantly in late trading, once again setting a new historical high. COMEX gold futures rose by 1.82%, while SHFE gold closed down 0.28%. U.S. policy uncertainty dragged down the Dollar Index, with the U.S. President hinting that he could manipulate the dollar. During late trading on Tuesday EST, the Dollar Index retreated rapidly, briefly falling below the 96 mark during the session to hit a four-year low, with an intraday decline exceeding 1%, providing support for gold's upward movement. Furthermore, the probability of a new U.S. government shutdown before the end of January has increased, further impacting market confidence in U.S. political and economic stability. Additionally, ongoing geopolitical tensions remain turbulent, with both crude oil and gold rising overnight. With the Federal Reserve's interest rate meeting imminent, the impact of monetary policy on gold may be limited, and gold is expected to maintain a volatile but strong trend in the short term.
On the geopolitical front, the United States will conduct a multi-day readiness exercise in the Middle East. Reports indicate that the U.S. has briefed Israel on preparations for actions against Iran, and the deployment of U.S. military forces around Iran has led markets to anticipate potential renewed geopolitical turmoil. The Federal Reserve's interest rate meeting is scheduled for this week, and the probability of a January rate cut remains low; however, given existing market expectations, its impact on gold has diminished. Nevertheless, amid ongoing disruptions from former President Trump regarding Greenland and the current situation with Iran, geopolitical tensions are escalating rather than subsiding. The market's shaken confidence in the U.S. dollar has become a powerful driving factor for gold, and under safe-haven demand, the short-term fervor for gold is unlikely to wane.
Written by: Li Qi Practicing Qualification: F3046227 Trading Advisory Qualification: Z0016145 Disclaimer: The information in this report is sourced from publicly available materials. Our company makes no guarantees regarding the accuracy, reliability, or completeness of this information, nor does it warrant that the information and recommendations contained herein will remain unchanged. We have strived for objectivity and fairness in the report's content. However, the views, conclusions, and suggestions provided are for reference only and do not constitute recommendations for any specific products, services, or operational guidance for related instruments. Investors making any investment decisions based on this information do so at their own risk, and neither the company nor the author bears any responsibility.
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