{"id":65578,"date":"2023-07-04T13:55:36","date_gmt":"2023-07-04T10:55:36","guid":{"rendered":"https:\/\/www.ironfx.com\/?p=65578"},"modified":"2024-08-26T12:27:29","modified_gmt":"2024-08-26T09:27:29","slug":"gold-analysis-today-interrupting-the-bears","status":"publish","type":"post","link":"https:\/\/www.ironfx-cn.com\/vi\/gold-analysis-today-interrupting-the-bears\/","title":{"rendered":"Gold Analysis Today: Interrupting the bears"},"content":{"rendered":"

The downward<\/strong> movement<\/strong> of gold\u2019s<\/strong> price<\/strong><\/a> seems to have been interrupted<\/strong> since the end of the past week<\/strong>. The rise of US yields<\/strong> over the past few<\/strong> days<\/strong> may have clipped<\/strong> the potential<\/strong> gains<\/strong> of gold\u2019s<\/strong> price<\/strong>, while USD\u2019s<\/strong> relative inactivity<\/strong> may have allowed gold\u2019s<\/strong> price<\/strong> to advance<\/strong> higher<\/strong>.<\/p>\n\n\n\n

We expect fundamentals<\/strong> including the Fed\u2019s<\/strong> intentions<\/strong> as well as financial<\/strong> data<\/strong> releases<\/strong> such as June\u2019s US employment report<\/strong> to influence the precious<\/strong> metal\u2019s<\/strong> price<\/strong> next week<\/strong>. In this report, we aim to shed light<\/strong> on the catalysts<\/strong> driving gold\u2019s<\/strong> price<\/strong>, assess its future<\/strong> outlook<\/strong> and conclude with a k\u1ef9 thu\u1eadt<\/strong> analysis<\/strong>.<\/p>\n\n\n\n

More rate hikes ahead<\/strong><\/h2>\n\n\n\n

The Fed\u2019s<\/strong> intentions<\/strong> seem to remain hawkish<\/strong>. It\u2019s characteristic that Fed<\/strong> Chairman<\/strong> Powell<\/strong> in his speech at ECB\u2019s<\/strong> annual<\/strong> forum<\/strong> in Sintra<\/strong> Portugal<\/strong>, doubled down<\/strong> on the bank\u2019s<\/strong> hawkish<\/strong> stance<\/strong> as he did not exclude the possibility of back-to-back<\/strong> rate hikes<\/strong> while also stating that \u201cIf you look at the data<\/strong> over the last quarter<\/strong>, what you see is stronger<\/strong> than expected growth<\/strong>, a tighter<\/strong> than expected labor market<\/strong> v\u00e0 higher<\/strong> than expected inflation<\/strong> \u2026<\/p>\n\n\n\n

That tells us that although policy<\/strong> is restrictive<\/strong>, it may not be restrictive<\/strong> enough<\/strong> and it has not been restrictive<\/strong> for long enough<\/strong>\u201d. Overall should the Fed\u2019s<\/strong> hawkishness<\/strong> be maintained<\/strong> we may see the USD<\/strong> gaining<\/strong> further ground<\/strong> and thus weighing<\/strong> on gold\u2019s<\/strong> price<\/strong>.<\/p>\n\n\n\n

Better than expected US data<\/strong><\/h2>\n\n\n\n

On the other hand, we note that better-than-expected<\/strong> data<\/strong> from the US<\/strong> showed that consumer<\/strong> sentiment<\/strong> for June is more optimistic<\/strong> than expected<\/strong>, while at the same<\/strong> time<\/strong>, the number<\/strong> of new home sales<\/strong> for May<\/strong> was higher<\/strong> than expected<\/strong>, both pointing<\/strong> towards<\/strong> a more robust<\/strong> US economy<\/strong> and an appetite<\/strong> for more spending<\/strong>.<\/p>\n\n\n\n

At the same time, the acceleration<\/strong> of the US GDP rate<\/strong> for Q1<\/strong>, tended to imply that the possibility<\/strong> of a recession<\/strong> in the US economy<\/strong> may be avoidable<\/strong>. Yet the release<\/strong> which may have characterized<\/strong> the week<\/strong> was on Friday<\/strong>, as the US<\/strong> core<\/strong> v\u00e0 headline<\/strong> PCE<\/strong> rates<\/strong> slowed down<\/strong>, maybe more than expected<\/strong>, implying that inflation<\/strong> is cooling off<\/strong> and thus weakening<\/strong> the USD<\/strong> allowing for Gold\u2019s<\/strong> price<\/strong> to ascend<\/strong> higher<\/strong>.<\/p>\n\n\n\n

Asian demand for gold remains mixed<\/strong><\/h2>\n\n\n\n

We note Commerzbank<\/strong> analyst\u2019s<\/strong> comments<\/strong> last Friday<\/strong>, that gold<\/strong> demand<\/strong> in China<\/strong>, the largest gold<\/strong> consumer<\/strong> worldwide<\/strong>, seems to have stabilised<\/strong> despite the weak<\/strong> economic<\/strong> recovery<\/strong>, which could be considered<\/strong> a positive<\/strong> for gold\u2019s<\/strong> price<\/strong>.<\/p>\n\n\n\n

On the other hand, it seems that demand<\/strong> in India<\/strong> is easing<\/strong> as investors<\/strong> in physical<\/strong> gold<\/strong>, coins<\/strong> v\u00e0 bars<\/strong>, are willing to postpone<\/strong> any purchases<\/strong> awaiting<\/strong> lower<\/strong> prices<\/strong>. At the same time, demand<\/strong> for jewelry<\/strong> seems also to have eased in India\u2019s<\/strong> huge<\/strong> gold<\/strong> market<\/strong>. There are still mixed<\/strong> signals<\/strong> from the two Asian<\/strong> qu\u1ed1c gia<\/strong> and its characteristic<\/strong> of the lack<\/strong> of direction<\/strong> in the overall V\u00e0ng<\/strong>–market<\/strong> in our opinion<\/strong>.<\/p>\n\n\n\n

Next tests for Gold\u2019s pric<\/strong>e<\/h2>\n\n\n\n

In the coming days, we highlight two key<\/strong> s\u1ef1 ki\u1ec7n<\/strong> for gold\u2019s<\/strong> price<\/strong>. The first is to be the release<\/strong> of the Fed\u2019s<\/strong> June<\/strong> meeting<\/strong> minutes<\/strong> tomorrow, Wednesday. The document<\/strong> is expected to be scrutinized<\/strong> by nh\u00e0 giao d\u1ecbch<\/strong> v\u00e0 analysts<\/strong> and should the Fed\u2019s<\/strong> aggressiveness<\/strong> be evident, we may see gold\u2019s<\/strong> price<\/strong> losing<\/strong> some ground<\/strong>. On Friday<\/strong> we highlight<\/strong> the release<\/strong> of the US employment report<\/strong> for June<\/strong>, The NFP<\/strong> figure<\/strong> is expected to<\/strong> drop, implying that the ability<\/strong> of the US economy<\/strong> to create new jobs<\/strong> is easing<\/strong>, while the unemployment rate<\/strong> is expected to drop<\/strong> as well implying that the US employment market<\/strong> is still tight<\/strong>. Lastly, the average earnings<\/strong> growth<\/strong> rate<\/strong> is expected to slow down<\/strong> a bit in a signal<\/strong> that the US employment<\/strong> market<\/strong> may ease its support<\/strong> for inflationary pressures<\/strong> in the US economy<\/strong>.<\/p>\n\n\n\n

Overall, a possible<\/strong> disappointment<\/strong> of the markets<\/strong> should be expected<\/strong>, if the NFP<\/strong> figure<\/strong> drops as th\u1ea5p<\/strong> as expected<\/strong> ho\u1eb7c even lower<\/strong>, which in turn may weaken<\/strong> the USD<\/strong> allowing gold\u2019s<\/strong> price<\/strong> to rise<\/strong>, yet the forecasts<\/strong> seem to imply<\/strong> that the US<\/strong> employment market<\/strong> is to remain tight<\/strong>, which may allow the Fed<\/strong> to continue<\/strong> its monetary policy<\/strong> tightening<\/strong> clipping<\/strong> any potential<\/strong> gains<\/strong> for the precious metal<\/strong>. We highlight<\/strong> that we may encounter<\/strong> increased<\/strong> Bi\u1ebfn \u0111\u1ed9ng<\/strong> around the time of the release<\/strong> hence some caution<\/strong> is advisable<\/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
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