On Wednesday (May 8), the price of gold continued to fall slightly by 0.2%, closing at $2308.64.
Source: Yi Huitong
No important economic data was released this week. Gold trading was lackluster. The slight rise in the US dollar in the foreign exchange market limited the upward space for gold, and gold continued to be slightly consolidated. Since no important data was released this week, the speeches of various Federal Reserve officials had a slight impact on the trend of the US dollar and gold. Speaking at an MIT event on Wednesday, Boston Federal Reserve Bank President Susan Collins (Susan Collins) said, “Economic activity needs to slow down to ensure a better match between demand and supply, so as to push inflation back towards official targets for a long time.” She said that as of now, in terms of monetary policy, “the recent unexpected rise in economic activity and inflation suggests that we may need to maintain the policy at the current level until we have greater confidence that inflation continues to approach 2%.” It is clear from their remarks that the Federal Reserve hopes to maintain the current high interest rate level until it sees that inflation actually falls within the target range, while at the same time being fully confident that the US economy will achieve a soft landing. Federal Reserve officials and other officials such as Jefferson, Collins, and Cook will speak one after another later. If they all agree, they all want to keep interest rates high for a longer period of time, then the US dollar is expected to be boosted, while gold will continue to be suppressed.
On a technical level, the price of gold has been in a downward trend channel since mid-April. The RSI indicator remains below the mid-50 line, indicating that the market is heavily bearish on gold. If the decline continues, the first downside target is at the psychological mark of 2,300 US dollars/ounce. Falling below this level may cause the price of gold to fall further to the lower limit of the channel of 2,260 US dollars/ounce. If the price of gold falls below these levels, it may trigger more stop-loss sales, causing the price of gold to fall further to the April 1 low of 2,228 US dollars/ounce, and may even test the integer mark of 2,200 US dollars/ounce. On the upside, short-term resistance is near the May 6 high of $2,232 per ounce. Stronger resistance is located at the confluence of the upper edge of the downtrend channel and the April 26 high, around $2350-2355 per ounce area. If the price of gold can break through these resistance zones, the next target will be the integer mark of $2,400 per ounce, followed by an all-time high of $2,432 per ounce.
Bank of China Guangdong Branch Wang Gang
This is a personal opinion only and does not represent the views of your organization