Hello traders,
During the Chinese Lunar New Year, just under a month into his presidency, Donald Trump made a series of moves regarding the US-Mexico-Canada tariff policy. First, he reached an agreement with Mexico to temporarily suspend the implementation of tariffs for a month, and then he met with Canadian Prime Minister Justin Trudeau to preliminarily establish a framework agreement for border security cooperation. However, these policy adjustments have triggered significant market turbulence, leaving investors on edge.
Firstly, the tariff war presents a dual game.
Trump's push for tariff policies shows two possible directions for the market: either maintain a hardline stance to gain negotiation benefits or adjust strategies under the immense pressure from Wall Street. Current market analysis generally leans toward the latter, as the recent announcement of a sovereign wealth fund by the US seems more like a signal. However, Trump's tariff strategy may be a "band-aid solution," as the source of available funds remains a complex issue in the face of a $36.2 trillion federal debt. Stabilizing the market through asset securitization could instead lead to the accumulation of leverage risks, creating long-term problems.
Secondly, the balance of the supply chain network is challenged by the tariff war.
One of the pillars of the North American economy is the highly integrated supply chain network among the US, Canada, and Mexico. Core industries such as automotive manufacturing, aviation, technology, and energy all rely on cross-border production collaboration. If the tariff war triggers a chain reaction leading to the disintegration of the supply chain, it could result in a wave of corporate bankruptcies and a tightening of credit. According to historical patterns of regional economic turmoil, this dynamic can easily accelerate the spread of crises.
Thirdly, the resulting liquidity pressure is gradually becoming a dark cloud.
Compared to the direct impact of tariff policies, the US market is facing a more dangerous undercurrent: liquidity pressure. This week, the Federal Reserve's net liquidity suddenly decreased by $250 billion, significantly raising the balance of the Treasury General Account (TGA), which led to a substantial contraction in available market funds. Meanwhile, major liquidity indicators, including Bitcoin, have shown weakness, and the bond market is under heavy pressure. The yield on the ten-year Treasury note has climbed to around 4.56%, and it may soon break the psychological barrier of 5%. The continuously rising US dollar index undoubtedly increases global funding costs, exacerbating capital inflow issues in emerging markets.
Recently, gold has shown notable trends. Throughout the Spring Festival holiday, gold exhibited a strong upward trend. As of yesterday, the spot gold price reached 2880 yuan per gram, driven primarily by significant pressure for physical delivery in the COMEX market.
Data shows that in January 2023, the COMEX market delivered 22,538 gold contracts, while in just the first three days of February, the delivery volume reached 40,649 contracts, with the total delivery for this month expected to approach 65,000 contracts. This figure far exceeds the previous record set in June 2020, which was 55,102 contracts. In 2020, due to a surge in delivery demand, gold prices quickly rose from $1,700 per ounce to nearly $2,100 per ounce.
Currently, from a technical perspective, gold prices are facing an important resistance level at 2880 yuan per gram, and a short-term pullback may occur. However, once this level is breached, gold prices are expected to further test the weekly Fibonacci extension levels, reaching the $2900 to $3000 per ounce range.
From the futures market data, the key range for the April 2025 COMEX gold contract is between $2828 and $2885 per ounce. Additionally, the 25 Delta risk reversal indicator is at 1.8, indicating a bullish market sentiment, while the concentration of call options (Call Wall) is also located at $2850 to $2880 per ounce, further reinforcing the importance of this resistance level.
In the short term, looking at Thursday and Friday's gold trends, the four-hour chart suggests that gold may experience a brief adjustment, with pullback target levels as follows:
TP1: 2825
TP2: 2807
TP3: 2790
GOOD LUCK!
LESS IS MORE!
During the Chinese Lunar New Year, just under a month into his presidency, Donald Trump made a series of moves regarding the US-Mexico-Canada tariff policy. First, he reached an agreement with Mexico to temporarily suspend the implementation of tariffs for a month, and then he met with Canadian Prime Minister Justin Trudeau to preliminarily establish a framework agreement for border security cooperation. However, these policy adjustments have triggered significant market turbulence, leaving investors on edge.
Firstly, the tariff war presents a dual game.
Trump's push for tariff policies shows two possible directions for the market: either maintain a hardline stance to gain negotiation benefits or adjust strategies under the immense pressure from Wall Street. Current market analysis generally leans toward the latter, as the recent announcement of a sovereign wealth fund by the US seems more like a signal. However, Trump's tariff strategy may be a "band-aid solution," as the source of available funds remains a complex issue in the face of a $36.2 trillion federal debt. Stabilizing the market through asset securitization could instead lead to the accumulation of leverage risks, creating long-term problems.
Secondly, the balance of the supply chain network is challenged by the tariff war.
One of the pillars of the North American economy is the highly integrated supply chain network among the US, Canada, and Mexico. Core industries such as automotive manufacturing, aviation, technology, and energy all rely on cross-border production collaboration. If the tariff war triggers a chain reaction leading to the disintegration of the supply chain, it could result in a wave of corporate bankruptcies and a tightening of credit. According to historical patterns of regional economic turmoil, this dynamic can easily accelerate the spread of crises.
Thirdly, the resulting liquidity pressure is gradually becoming a dark cloud.
Compared to the direct impact of tariff policies, the US market is facing a more dangerous undercurrent: liquidity pressure. This week, the Federal Reserve's net liquidity suddenly decreased by $250 billion, significantly raising the balance of the Treasury General Account (TGA), which led to a substantial contraction in available market funds. Meanwhile, major liquidity indicators, including Bitcoin, have shown weakness, and the bond market is under heavy pressure. The yield on the ten-year Treasury note has climbed to around 4.56%, and it may soon break the psychological barrier of 5%. The continuously rising US dollar index undoubtedly increases global funding costs, exacerbating capital inflow issues in emerging markets.
Recently, gold has shown notable trends. Throughout the Spring Festival holiday, gold exhibited a strong upward trend. As of yesterday, the spot gold price reached 2880 yuan per gram, driven primarily by significant pressure for physical delivery in the COMEX market.
Data shows that in January 2023, the COMEX market delivered 22,538 gold contracts, while in just the first three days of February, the delivery volume reached 40,649 contracts, with the total delivery for this month expected to approach 65,000 contracts. This figure far exceeds the previous record set in June 2020, which was 55,102 contracts. In 2020, due to a surge in delivery demand, gold prices quickly rose from $1,700 per ounce to nearly $2,100 per ounce.
Currently, from a technical perspective, gold prices are facing an important resistance level at 2880 yuan per gram, and a short-term pullback may occur. However, once this level is breached, gold prices are expected to further test the weekly Fibonacci extension levels, reaching the $2900 to $3000 per ounce range.
From the futures market data, the key range for the April 2025 COMEX gold contract is between $2828 and $2885 per ounce. Additionally, the 25 Delta risk reversal indicator is at 1.8, indicating a bullish market sentiment, while the concentration of call options (Call Wall) is also located at $2850 to $2880 per ounce, further reinforcing the importance of this resistance level.
In the short term, looking at Thursday and Friday's gold trends, the four-hour chart suggests that gold may experience a brief adjustment, with pullback target levels as follows:
TP1: 2825
TP2: 2807
TP3: 2790
GOOD LUCK!
LESS IS MORE!
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Tele: t.me/+Q5K2Z5r3BhCe1c1l
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Disclaimer
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Copy trading service：social.xm.com/s/kRqA3rRj ABC Swing trading strategy Course Consul wechat: ziyuvera
signalsofswingtrading.com
Tele: t.me/+Q5K2Z5r3BhCe1c1l
signalsofswingtrading.com
Tele: t.me/+Q5K2Z5r3BhCe1c1l
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.