On Friday (May 17), the price of gold rose. Spot gold rose 1.5% to $2,412.83 an ounce, approaching the record high of $2,431.29 set on April 12, and the weekly rise for the second week in a row.
Source: Yi Huitong
The monthly rate of the leading indicator of the US April Council announced on Friday was -0.6%, lower than market expectations of -0.3%. The previous value was -0.3%. Another decline in US economic indicators confirms that the future economic situation will be even weaker. Deteriorating consumer prospects for the business environment, a decline in new orders, negative yield differences, and a decline in new construction permits led to a decline in the April indicators. Furthermore, the monthly rate of the Council's leading indicators showed negative growth for the first time since October last year. Although six-month and annual growth rates no longer indicate an impending recession, they still indicate that future growth will face serious resistance. In fact, high inflation, high interest rates, rising household debt, and draining pandemic savings are all expected to continue to weigh on the US economy in 2024. As a result, some institutions expect real GDP growth to slow below 1% from the second quarter to the third quarter of 2024. Furthermore, the CPI, retail sales, and other data reflecting inflation released by the US last week have all eased markedly, once again raising the market's expectations that the Federal Reserve will speed up the pace of interest rate cuts this year. To this end, gold also responded positively to the view that US inflation may be under control and that the US hopes of cutting interest rates will be revived. It can be said that any current claims about long-term implementation of high interest rates will be greatly discounted, and the impact on gold restraint is expected to gradually weaken.
On a technical level, international gold rose sharply and closed strongly on Friday. The daily line recorded a strong positive physical column. Short-term gold prices rose sharply to break away from the daily moving average technical indicator support line, further exacerbating the daily moving average's more regular upward divergence. Various technical indicators formed a clear upward trend, maintaining a relatively high daily level of guidance. The four-hour line shows that the continued rise in short-term gold prices intensifies the four-hour indicator's relatively tidy bullish arrangement. Continued sharp increases trigger four-hour RSI overbought performance. Short-term gold prices may be subject to corrective demand, but as long as the gold price remains above the 2380 level, the market may experience a strong one-sided upward trend in the future.
Bank of China Guangdong Branch Wang Gang
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