Daily Report 180914 2014-09-18
Macro economy
After people’s attention was drawn to the Fed on Wednesday, the U.S. benchmark index closes basically around the level in accordance with the Fed’s promise that the benchmark rate will remain near the low. Specifically, the S & P 500 index closes at 2,001.57 basis points, rebounding back above 2,000 basis points again. The Dow Jones industrial index rose by 24.88 basis points to its new record high 17,156.85 basis points. Moreover, the highest increase of the Dow Jones industrial index during the intraday trading is 89 basis points. However, the U.S. CPI data released yesterday is not as good as expected, which indicates the Fed is not that urgent toward the rate hike. In the end, the Fed claims to keep the promise that remaining the interest rate low in quite a long time after the assets purchasing project. The timing to raise the Fed funds rate should still be based on economic data.
In terms of the Europe, latest released data shows that the Europe’s CPI in August increases by 0.4% on year-on-year basis, which is better than expected. The pressure of the ECB is believed to be eased. It is a positive sign for the Europe’s weak economy.
Domestically, Premier Li Keqiang yesterday spoke at the executive meeting of the state council that the government will increasingly support the financing of micro enterprises and provide financial support to them, which is considered to promote the economy and improve people’s livelihood. The central bank's monetary policy committee member Chen Yulu claims through Xinhua news agency on the same day that it is not the time for China to cut rate. It is still necessary to stick to sound monetary policy. Although China’s economy is facing strong downward pressure, the monetary policy should not be dependent on strong stimulus. Revolution will continue to be the first choice to promote the economy. 
The domestic gold fluctuates violently during the intraday trading and closes slightly lower in the night market. The performance of gold under the five-day moving average at RMB 246 will be tested. The Fed stated in this meeting about the interest rate that the rate will remain low in quite a long time after the assets purchasing project finishes in the next month. It is believed the U.S. inflation data is stable due to a downward trend of the price of crude oil. Besides, the employment data is not greatly improved. All these factors make it possible for the Fed to keep the rate low. However, there are discusses in the recent two meetings about the quitting strategy of assets purchasing project. The pace of rate hike may be faster than expected during the time period when the economy is recovering. Influenced by the policy, the U.S. dollar index kept increasing and the U.S. bonds closed higher. The gold price was then forced to drop. The result of Scotland referendum should be focused on today. The short-term fluctuation of the GBP and USD will be crucial elements to determine the trend of gold.
In terms of operations, previous short positions opened higher than RMB 249.5 could be held. Dynamic of short-term rebound seems slightly insufficient. If the market trading volume is weak, short positions are recommended for short-term investment, with stop-profit setting at RMB 244 and stop-loss setting at RMB 247.7. 
The domestic silver fluctuates violently during the intraday trading and closes flat in the night market. Recently, domestic future price has straight discount compared with the spot. Spot market appears to be really resilient. The overnight silver ETF positions increase 29.83 tons, indicating funds investors tend to buy silver when the price is low. Considering the special character of silver, it may be hard for the silver to get out of the trend independently. Investors could have a certain level of future and spot spreading or adopt gold and silver index strategy.
In terms of operations, the downward trend of silver remains. Previous short positions opened at RMB 4130 could be held. In short-term aspect, there is strong pressure from the 20-day moving average at RMB 4110. During the intraday trading, the critical point should be set at RMB 4070 according to the 5-day moving average. If the market trading volume is weak, short positions are recommended for short-term investment, with stop-loss set at RMB 4085 and stop-profit set at RMB 4040.
                                                                                                               Dong LV (Investment Certificate NO. TZ008452)