{"id":64756,"date":"2023-06-20T13:26:31","date_gmt":"2023-06-20T10:26:31","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=64756"},"modified":"2024-08-26T11:38:28","modified_gmt":"2024-08-26T08:38:28","slug":"gold-outlook-steady-she-goes","status":"publish","type":"post","link":"https:\/\/www.ironfx-cn.com\/fa\/gold-outlook-steady-she-goes\/","title":{"rendered":"Gold Outlook: Steady she goes"},"content":{"rendered":"

\u0637\u0644\u0627<\/strong> started to slip<\/strong> over the past few days yet the overall<\/strong> picture<\/strong> of a sideways<\/strong> motion<\/strong> seems to prevail<\/strong>. The slight<\/strong> strengthening<\/strong> of the USD<\/strong> seems to have activated<\/strong> gold\u2019s<\/strong> bears<\/strong> given also the recent financial<\/strong> releases<\/strong> \u0648 monetary<\/strong> policy<\/strong> \u0631\u0648\u06cc\u062f\u0627\u062f\u0647\u0627<\/strong>. In this report, we aim to shed light<\/strong> on the catalysts<\/strong> driving the precious<\/strong> metal\u2019s<\/strong> price<\/strong>, assess its future<\/strong> outlook<\/strong> and conclude with a \u0641\u0646\u06cc<\/strong> analysis<\/strong>.<\/p>\n\n\n\n

The Fed remains on hold<\/strong><\/h2>\n\n\n\n

Last week the Federal Reserve<\/strong> remained on hold<\/strong>, keeping interest<\/strong> rates<\/strong> steady<\/strong>, as was widely anticipated<\/strong> by market analysts<\/strong>, yet the release<\/strong> tended to boost<\/strong> the greenback<\/strong> which in turn weighed<\/strong> on the precious<\/strong> metal\u2019s<\/strong> price<\/strong>. Fed Chair Powell<\/strong> reiterated on numerous occasions<\/strong> that despite<\/strong> remaining on hold<\/strong>, this does not mean that the Fed<\/strong> is done<\/strong> with hiking<\/strong> interest<\/strong> rates<\/strong>, thus leaving the door<\/strong> open<\/strong> for future<\/strong> rate<\/strong> hikes<\/strong>.<\/p>\n\n\n\n

As the median<\/strong> is now revised<\/strong> upwards<\/strong> by 0.5%, it may imply that the Fed<\/strong> may hike<\/strong> two more times<\/strong> by the end<\/strong> of the<\/strong> year with rate cuts<\/strong> \u201ca few years out<\/strong>\u201d according to Powell<\/strong>. Interestingly, the Dot plot<\/strong> moved higher following the FOMC<\/strong> interest<\/strong> rate<\/strong> decision<\/strong>, with Fed<\/strong> policymakers<\/strong> now anticipating the Fed\u2019s<\/strong> terminal<\/strong> rate<\/strong> to be higher<\/strong> than what was previously expected<\/strong> with the median rate<\/strong> by the end of the year now being 5.6% compared to March\u2019s<\/strong> meeting<\/strong> at which it was 5.1%.<\/p>\n\n\n\n

Overall<\/strong> the forward guidance<\/strong> provided by the bank<\/strong> tended to lean on the hawkish side<\/strong> which may continue to weigh<\/strong> on gold\u2019s price<\/strong>. Furthermore, <\/a>we expect the negative correlation<\/strong> of gold\u2019s price<\/strong> to the USD<\/strong> to be maintained<\/strong> and note as the next test for gold\u2019s price<\/strong> Fed Chairman Powell\u2019s<\/strong>  <\/strong> before the US Congress<\/strong> on Wednesday and Thursday.<\/p>\n\n\n\n

Should the Fed Chairman<\/strong> sound hawkish<\/strong> enough we may see the precious<\/strong> metal\u2019s<\/strong> price<\/strong> dropping even further. Furthermore, we would like to draw your attention<\/strong> to US yields<\/strong> as they have been on the rise<\/strong> in the past week<\/strong>. Should the US yields<\/strong> continue to rise<\/strong>, we may see the US bond market<\/strong> posing as an attractive<\/strong> alternative<\/strong> to the non-interest-bearing<\/strong> precious<\/strong> metal<\/strong> and thus weighing on gold\u2019s<\/strong> price<\/strong>. <\/p>\n\n\n\n

China\u2019s demand for gold eases<\/strong><\/h2>\n\n\n\n

Demand for \u0637\u0644\u0627 <\/strong>from China <\/strong>seems to be easing <\/strong>as the recovery <\/strong>of the Chinese economy <\/strong>seems to be facing headwinds<\/strong>. It should be noted <\/strong>that China\u2019s trade surplus <\/strong>narrowed to one-year lows<\/strong>, an indication <\/strong>of fewer international trading transactions <\/strong>and thus lesser wealth <\/strong>entering the Chinese economy<\/strong>.<\/p>\n\n\n\n

Yet that could be a consequence <\/strong>of the contraction <\/strong>of economic activity <\/strong>suffered by China\u2019s crucial manufacturing sector<\/strong>. It\u2019s characteristic that the Urban investment<\/strong>, industrial production <\/strong>\u0648 retail sales growth rates<\/strong>, all slowed down <\/strong>for May <\/strong>underscoring the difficulties <\/strong>faced by the Chinese economy <\/strong>on its road <\/strong>to recovery<\/strong>. It\u2019s understandable <\/strong>that the investment <\/strong>of Chinese citizens <\/strong>in gold <\/strong>seems to have eased <\/strong>as the result <\/strong>of a weak recovery<\/strong>. It should be noted that analysts highlight <\/strong>the role played <\/strong>by China\u2019s demand <\/strong>for physical gold<\/strong>, in driving gold\u2019s price <\/strong>above the $2000 per ounce threshold.<\/p>\n\n\n\n

For the time being, we note that the Central Bank of the People’s Republic of China <\/strong>cut lending rates <\/strong>in an effort to boost activity <\/strong>in the Chinese economy<\/strong>, yet the cuts delivered <\/strong>may not be sufficient <\/strong>to revive <\/strong>it. Overall should the difficulties <\/strong>for the Chinese economy <\/strong>to recover <\/strong>be extended <\/strong>we may see gold\u2019s price weakening <\/strong>further and vice versa<\/strong>.<\/p>\n\n\n\n

Technical Analysis – Gold<\/strong><\/h2>\n\n\n\n

XAUUSD H4 Chart<\/em><\/strong><\/h3>\n\n\n\n
\"\"<\/figure>\n\n\n\n