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Market news: Nvidia partner GMI Cloud is seeking a $635 million GPU mortgage loan.BP (BP.N) said on Tuesday that it expects its oil trading business to continue growing in the second quarter, but upstream oil and gas production will be lower than in the first quarter. The company is still navigating the impact of market volatility as the conflict in Iran continues to disrupt global energy markets. The company said it expects its oil trading business to perform slightly better in the second quarter than in the first quarter (January to March). The company expects upstream production in the second quarter to be between 2.17 million and 2.22 million barrels of oil equivalent per day, down from 2.34 million barrels of oil equivalent per day in the first quarter. The decline in upstream production is mainly due to seasonal maintenance and disruptions in the Middle East.July 14th - With the summer vacation approaching, cross-border travel in the Guangdong-Hong Kong-Macao Greater Bay Area is booming, and passenger traffic at the Gongbei Port, which is connected to Macao by land, continues to increase. Since July, the Gongbei Port has seen an average of over 310,000 inbound and outbound passengers per day. According to Gongbei Customs, in the first half of this year, the total number of inbound and outbound passengers at the Gongbei Port exceeded 64 million, a 6% increase compared to the same period last year, with a peak daily passenger flow of 460,000.Euro Stoxx 50 futures fell 0.35%, German DAX futures fell 0.35%, and UK FTSE futures fell 0.28%.1. Sudden Geopolitical Military Conflict: Serious clashes erupted in the Strait of Hormuz and surrounding waters. According to CCTV and other media reports, two UAE oil tankers were attacked by Iranian cruise missiles in the southern channel of the strait (resulting in one death and eight injuries); the Iranian Revolutionary Guard announced the attack and destruction of two foreign oil tankers that ignored warnings. Simultaneously, the US Central Command announced it would reinstate the blockade of maritime traffic to and from Iranian ports at 4:00 AM Beijing time on July 15th. 2. Macroeconomic Policy and Concerns about Soaring Transportation Costs: Trump stated he would impose a 20% protection fee on all goods transported through the Strait of Hormuz. Rico Luman, senior economist at ING, estimated this could increase the cost of transporting oil through the strait by another $16 per barrel (to $26), potentially increasing the overall cost of a large oil tanker by over $30 million. 3. Weakening Spot Prices: The spot market is entering a downward trend, shifting from a period of high demand to a lower price. The latest SCFIS European line is 3656.38 points, slightly lower than expected. According to Haitong Futures statistics, the market average for Late July is approximately $5130 USD for a container load (TCL). It is expected that the OA and PA alliances still have room to follow Maersks $4800 USD adjustment for 30-week TCL openings, and the average could potentially fall below $5000 USD. 4. Haitong Futures view: The EC main contract is currently betting on the actual downward slope after freight rates peak. The previously anticipated low capacity in the 31-week period might have altered the current linear extrapolation of the downward freight rate path, but the current adjustment after the empty schedule has smoothed the decline. The 08 contract valuation has already largely priced in the subsequent decline; observe whether there is a possibility of a gradual decline. There is a lack of significant marginal improvement drivers in the short term. 5. Guangfa Futures view: Geopolitical disturbances have resurfaced, and short-term downward momentum is nearing exhaustion. For longer-term contracts, the expectation of the resumption of Red Sea shipping, coupled with the uncertainty of the US-Iran conflict, results in greater volatility, but there is currently no clear trend. (The above content is compiled from publicly available market information from Haitong Futures, Guotou Futures, etc., and is for reference only. It does not constitute investment advice.)

June Gold Buyers May Face Difficulties at $1987.60

Larissa Barlow

Apr 14, 2022 10:14

The market's strength is being fueled by demand for a hedge against rising inflation during the Russia-Ukraine conflict, lessening pressure from expectations of an aggressive US interest rate hike, and the US Dollar's intraday reversal top.

 

June Comex gold futures are currently trading at $1982.70, up $6.60 or 0.33 percent from their previous close. The SPDR Gold Shares ETF (GLD) is currently trading at $184.66, up $0.89 or 0.48 percent from its previous close.

 

Gold is regarded as an inflation hedge and a hedge against geopolitical concerns. However, higher interest rates in the United States would increase the opportunity cost of storing non-yielding bullion and strengthen the dollar against which it is valued.

 

However, the price action shows that gold buyers are seeking insurance against inflation and are not very concerned about opportunity costs at the moment. Despite all of the Fed's hawkish rhetoric and anticipation for aggressive rate hikes, we have yet to witness a shift in the direction of inflation.

 

Gold is likely to remain underpinned for the foreseeable future as long as the inflation arrow continues to point upward and the Ukraine war continues.

 

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Technical Analysis of the Daily Swing Chart

According to the daily swing chart, the primary trend is upward. A move over the intraday high of $1985.50 reaffirms the uptrend. A break of $1916.20 will revert the major trend to the downside.

 

On the upside, the retracement zone between $1987.60 and $2009.90 is the nearest objective.

 

On the downside, the long-term Fibonacci level at $1958.70 serves as the initial support, followed by the short-term 50% level at $1932.90.

Technical Forecast for the Daily Swing Chart

The June Comex gold futures market's path through Wednesday's close is likely to be dictated by trader reaction to the 50% level at $1987.60.

Scenario of Bullishness

A sustained move above $1987.60 will signal that buyers are present. This could provide the necessary momentum for a test of the Fibonacci level at $2009.90. This is a trigger point for an upside acceleration.

Scenario of the Bear

A persistent decline below $1987.60 indicates the existence of sellers. They intend to attempt the formation of a secondary lower top. This, if successful, might result in a break into $1958.70.

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