On December 16th, the Federal Reserve maintained interest rates unchanged and will continue to maintain the current monthly bond purchase plan scale; The US dollar index rose to 90.713 during the session, but after Powell's speech, the US dollar quickly took back its gains and hovered around a two-year low again. Gold rose strongly with a V-shaped rebound, with spot gold hitting a nearly week high of $1865.81 per ounce; Spot silver surged 4% to a new high of $25.497 per ounce since November 9th. The improvement in demand prospects has supported oil prices, with oil prices rising for three consecutive days, reaching a new high of $51.20 per barrel since early March.

01

gold

On Wednesday (December 16th), COMEX February gold futures closed 0.2% higher at $1859.10 per ounce. Federal Reserve Chairman Powell stated that the United States urgently needs fiscal policy and that the Federal Reserve will not preemptively raise interest rates until inflation returns to normal.

At its final meeting of the year, the Federal Reserve strengthened its commitment to supporting the economy and will maintain a large-scale asset purchase program until "substantial further progress" is made in employment and inflation. Powell said at a press conference that the coming months will be full of challenges, and if necessary, the Federal Reserve can expand bond purchases and adjust the duration of bonds purchased.

After the Federal Reserve meeting, gold prices initially fell as policymakers delayed adjusting bond buying institutions, disappointing some investors who hoped the Fed would buy more long-term bonds. Tai Wong, head of metal derivatives trading at BMO Capital Markets, said that after Powell's soothing speech, gold rebounded strongly in a V-shaped pattern and rose.

On the daily line, the Bollinger Belt's three tracks tend to run flat, with the MA5 moving average and MA10 moving average closing at a dead fork. The K-line intersects near the MA40 moving average between the Bollinger Belt's middle and upper tracks, and the MACD fast and slow tracks move up at a golden cross below the zero axis. The red kinetic energy slightly increases, and the KDJ three tracks move towards a golden cross. On the daily line, the yellow gold is expected to rebound and rise further; On the 4-hour chart, the Bollinger Belt runs upwards with a three track opening, with the MA5 moving average and MA10 moving average crossing upwards. The K-line intersects above the MA5 moving average between the upper and middle tracks in Bollinger, and the MACD fast slow line crosses upwards on the 0 axis, with more short gold lines.

Overall, intraday operations are mainly low. The initial resistance above is around 1870, and the further resistance is around 1880; The initial support below is at 1860, and further support is at 1845.

02

crude oil

On Wednesday (December 16th), WTI January crude oil futures closed up 0.20 US dollars, or 0.42%, at 47.82 US dollars per barrel; Brent February crude oil futures closed up 0.32 US dollars, or 0.63%, at 51.08 US dollars per barrel. Due to an unexpected decline in US inventory, crude oil prices have closed higher, but the increase in gasoline and diesel supply highlights weak fuel demand, limiting the increase in oil prices.

A report from the US government shows that domestic crude oil inventories decreased by over 3 million barrels last week. However, the data also shows an increase in finished oil supply, with gasoline inventories reaching their highest level since August. Rob Thummel, portfolio manager at Tortoise, said that a rebound in exports and a significant decline in imports have led to a decrease in crude oil inventories. However, a decrease in people's travel will affect gasoline demand.

Although crude oil futures fluctuate on a daily basis, the rise in physical crude oil prices reflects an improvement in market fundamentals as Asia leads the recovery of demand from the impact of the pandemic. The large procurement of refineries in India and China has raised crude oil prices in Russia, the Middle East, Latin America, and the United States. At the same time, other areas of the oil market are also sending positive signals, such as the increase in diesel prices, which has increased profits in processing light crude oil.

Bob Yawger, head of Mizuho Energy Futures, said that after last week's inventory increase, we can't afford any more inventory increase. The US stimulus plan is imminent, which will also provide support.

Lukman Otunuga, market analysis manager of FXTM, said that with the approval and promotion of COVID-19 vaccine in many countries around the world, the market expected that global crude oil demand would recover. As some of the world's largest economies have successively joined the ranks of approving the emergency use authorization of COVID-19 vaccine, the prospects for the recovery of crude oil demand in the short term have become brighter.

On the US crude oil daily line, the Bollinger Belt runs upward with three tracks, and the MA5 moving average and MA10 moving average cross upward with a gold cross. The K-line trades above the MA5 moving average between the Bollinger Middle and Upper tracks, while the gold cross above the MACD Fast Slow Line 0 axis eases upward, resulting in a higher daily market trend; On the 4-hour chart, the Bollinger Belt has a slight opening in the three tracks, with the MA5/MA10 moving average crossing upwards. The K-line intersects between the Bollinger Belt and the MA5 moving average, with the MACD fast slow line crossing smoothly above the 0 axis, and the KDJ three track crossing running, resulting in higher oil prices in the short term.

Overall, the short-term operation is mainly characterized by low to high resistance, with initial resistance around 49.0 above and further resistance at 50.0; The initial support below is around 47.5, and further support is at 47.0.

03

American Finger

The US dollar index rose to 90.713 in the intraday trading session, after the Federal Reserve's interest rate decision-making committee stated that it will continue to maintain its current monthly bond purchase plan until the economy improves significantly. But the US dollar quickly took back its gains and hovered near a two-year low again. The US dollar index ended at 90.228, down 0.29%. Deutsche Bank's Alan Ruskin is bearish on the US dollar, indicating that the S&P 500 index is once again knocking at 3700 points, and to our knowledge, nothing will change positive risk appetite. Powell also said that the US economy urgently needs financial support. The leaders of both parties in the US Congress are urgently finalizing the bailout bill in order to merge it with the government spending bill and pass it before the weekend. The Federal Reserve also extended to the end of September 2021 two tools aimed at ensuring the stable supply of dollars worldwide and the smooth operation of the US treasury bond bond market. The Federal Reserve has also voted to maintain bond purchases of at least $120 billion per month, but the composition remains unchanged. The dot matrix continues to predict that interest rates will remain near zero until the end of 2023. The Federal Reserve has also extended the temporary repurchase agreement tool for overseas central banks and international monetary authorities. CIPC's Bipan Rai stated that extending the US dollar swap arrangement and FIMA has expanded the potential for US dollar supply. Erik Nelson, macro strategist at Wells Fargo Bank in New York, said, 'I believe this is largely related to the actions that the Federal Reserve did not take, especially extending the term of bond purchases or increasing the size of purchases, as some had clearly expected the Fed to do so.'. Today's policy decision sends a signal that the Federal Reserve is not worried about an increase in longer-term US Treasury yields. I'm not sure if the market is fully aware of this.

04

Europe and America

Strong Eurozone data and hopes of progress in Brexit negotiations in the UK have pushed the euro above $1.2212 against the US dollar for the first time since April 2018, but have since fallen back. The euro was last traded at $1.2186 against the US dollar, up 0.29%.

06

Pound beauty

The pound is supported by optimistic expectations that a Brexit trade agreement is expected to be reached this week; The pound rose 0.36% to 1.3509 against the US dollar, hitting 1.3554 in the session, the highest since May 2018.

07

mega

The US dollar rose 0.33% against the Canadian dollar to 1.2743; The currency pair fell to 1.2688 on Tuesday, its lowest level since 2018; Profit taking occurred after Bank of Canada Governor Tiff Macklem expressed concern about the appreciation of the Canadian dollar.