2023-08-14 02:32:00
Gold market analysis: If it falls below $1,910, it will seriously threaten the support of $1,900
Spot gold continued to close slightly lower on Friday (August 11), dragged down by a stronger U.S. dollar and rising U.S. Treasury yields. At the end of the U.S. market, spot gold closed at $1,912.14 per ounce, with an intraday high of $1,920.92 per ounce and a low of $1,910.56 per ounce. Over the past week, spot gold fell $29.03, or 1.49%. That marked its worst weekly performance since late June. Investors are now assessing the latest batch of inflation reports and consumer sentiment for more clues on the Fed’s next move on interest rates.
Gold prices fell this week despite U.S. inflation data released last Thursday, which came in slightly weaker than expected, as worries that inflationary pressures might accelerate once more, as well as worries that U.S. Treasury yields and the dollar might continue to climb, weakened sentiment for gold. demand. At the time, San Francisco Fed President Daly said the central bank had more work to do to curb inflation, even though the latest data showed that the consumer price index (CPI) rose just 0.2% in July. Another major inflation report on Friday further complicated the situation. The U.S. Labor Department reported on Friday that the producer price index (PPI) rose 0.3% in July, higher than a revised flat figure in June and the biggest gain since January. The core producer price index, which strips out volatile food, energy and trade services prices, rose 0.2 percent in July, up from a 0.1 percent gain the previous month. The rise in the producer price index still indicates that the inflation in the United States may be difficult to return to the target expected by the Federal Reserve for a while, which means that the high interest rate of the dollar will not turn around quickly, and the possibility of further increase cannot even be ruled out. Economists surveyed by The Wall Street Journal had expected consumer confidence to edge up to 71.7 in August. Another key part of the report is a measure of inflation expectations. The report showed Americans’ expectations for headline inflation over the next year slipped to 3.3% in August from 3.4% the previous month, while expectations for inflation over the next five years fell slightly to 2.9% from 3%. As a result, markets remain skeptical that the Fed will hike rates one more time in this cycle. If more data can prove that the US interest rate is expected to peak before the September interest rate meeting, the need for further interest rate hikes will be greatly reduced. Then gold is expected to get a chance to ease from the recent decline.
On the technical level, on the daily chart, the stochastic indicator continued to cross downward, and the downward trend showed no signs of turning around. In the Bollinger Bands channel, continue to go down along the lower rail, and the signal is bearish. On the short-term 4-hour chart, the price of gold continues to be suppressed below the short-term moving average, while the technical indicators show passivation. Currently, around the $1910 level, the bulls and the bears are competing. If it falls below 1910, the bottom will seriously threaten the support of the 1900 integer mark. If it falls further, the bottom will test the water levels of 1890 and 1865 in turn. At present, due to the lack of favorable factors, it is quite difficult for gold to recover.
Wang Gang, Guangdong Branch, Bank of China
Opinions are personal and do not represent those of the organization
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