The confidence of gold bulls in the easy money cycle is growing

In November, the gold price accelerated its downward trend, falling more than $200 / ounce in the range and falling as much as 46 yuan/gram in the inner session.Into December, gold prices began to rebound mode, London spot gold has broken through $1850 / ounce, is trying to challenge $1875 - $1905 / ounce resistance, the inner gold is also trying to hit 400 yuan/gram integer mark, long confidence reignited.

In an easy money cycle, inflation expectations will be traded in the medium to long term.In 2021, monetary policy will remain in an easy cycle, commodity prices will generally strengthen, the global economy is expected to recover one after another as the epidemic is gradually brought under control, inflation expectations will also increase, and real market yields are expected to decline even if nominal interest rates remain unchanged, which will continue to support gold prices in the medium and long term.From the perspective of real interest rates, gold's structural bull market is not over yet;From the perspective of policy, monetary policy lays the foundation for gold bull market, while the rhythm of fiscal policy will affect market expectations, thus affecting the fluctuation rhythm of precious metal prices.

In the short to medium term, the market is still focused on the epidemic and vaccine progress, Brexit, the US stimulus bill and other topics.Based on the experience of China's epidemic situation and economic recovery, the basic path of global economic recovery is to first control the epidemic, then start business one after another, and gradually resume economic activities. Finally, the partial emergence of the epidemic will not affect economic development.

In November, the price of gold fell on a wave of positive vaccine developments, as expectations about the speed of the global economic recovery grew and policy overpricing faded.However, at present, there are still many problems in the specific promotion of the vaccine. The number of COVID-19 deaths in Europe and The United States keeps climbing, and the number of new cases in the United States is more than 150,000 per day. With the approach of Holidays such as Christmas, the epidemic cannot be improved for a short time.Although countries such as the UK have started mass vaccinations across the country, the total number of people available will remain limited until the first quarter of next year.

Vaccines work push for financial support, so the market for the recent high expectations, a new round of economic stimulus bill landing on December 8, local time, the us Treasury secretary, Mr Qin with U.S. house speaker Nancy pelosi to speak on the stimulus bill, and submit a copy of the $916 billion will be coronavirus assistance program, and if the plan can be successfully implemented, will increase the attraction of the gold as a hedge against inflation risk.

Meanwhile, geopolitical factors such as Britain's departure from the European Union are also closely watched by the market.It has had a major impact on the market in 2016, and investors need to keep an eye on the fact that the event could have an impact on the gold market at any time, given the approach of the Brexit deadline of December 31.As the dollar and gold have a safe-haven nature, so the possibility of a repeat of the dollar, gold with the situation.

Gold has rallied strongly after testing support around $1,765 an ounce and remains technically bullish in the short term.If gold can stay above $1,850 an ounce, we see an opportunity to test the November high at $1,900 an ounce, with key support remaining below the 200-day moving average in the medium term.In the current market structure, we think medium-term support levels below are good to buy.