On Tuesday (May 7), the price of gold fell after rising on the previous trading day. Spot gold fell slightly by 0.3% to $2,315.68 an ounce.
Source: Yi Huitong
Hamas issued a statement on May 6, local time, announcing that it agreed to the proposed cease-fire in the Gaza Strip proposed by the mediator. An Israeli official claims that Israel has received a response from Hamas to the Egyptian side regarding the cease-fire and release of the detainees, and is currently studying the response. The news caused a rebound in risk appetite in the market, which slightly suppressed safe-haven purchases of gold. Moreover, this week's data is poor, and the statement issued by the Federal Reserve on currency interest rates has had a more or less weak impact on the trend of gold. Federal Reserve official Minneapolis Federal Reserve President Kashkari said at the Milken Institute meeting that the estimate for neutral interest rates was moderately raised from 2% to 2.5%; it is still too early to announce that inflation progress has stagnated. If necessary, the most likely outcome is to maintain current interest rates for a longer period of time; the June personal bitmap guide may be to cut interest rates 2, 1, or not this year. More data is needed to know whether progress in returning inflation to the 2% target has stalled, and it is too early to announce that it has definitely stalled. This statement represents the trend of many members within the Federal Reserve, that is, the inflation situation is still not optimistic, and it is necessary to maintain high interest rates for a longer period of time. Expectations of when the Federal Reserve will cut interest rates have been delayed over and over again, hindering the progress of gold. If the geographical conflict situation in the Middle East is expected to ease and risk aversion declines, gold may face a further correction trend.
On a technical level, the price of gold currently remains below $2325.90 per ounce. The stochastic indicator sends a bearish signal, and the MACD signal line shows no signs of turning to an inflection point, which indicates that the risk of gold price retracement has not been lifted. Once the bottom falls below the lowest level of this round of retracement at $2,276, the next major target will be $2260.60 per ounce, which is supported by the 38.2% retracement level of the 1984-2431 rally. However, if the price of gold rises above 2325.90, this will break the bearish signal and may cause the price of gold to try to regain its upward trend.
Bank of China Guangdong Branch Wang Gang
This is a personal opinion only and does not represent the views of your organization