Macro Analysis for GOLD
Hello everyone! Today i want to share some macro analysis with you! Hope it can help you!
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$XAU/USD(XAUUSD.FOREX)$ $Gold - main 2408(GCmain)$ What happened? ! Gold prices suddenly fell back sharply after soaring this week. How will gold prices go next week with heavy data coming!
The gold market fluctuated violently this week. Before Friday, gold prices recorded a considerable weekly gain, but after Friday's plunge, gold prices turned to decline on a weekly basis.
Gold once gained bullish momentum this week, but erased weekly gains before the weekend. Recent technicals have not yet highlighted the strengthening of bullish momentum. Investors will pay close attention to geopolitical and US data next week.
Friday's plunge caused gold prices to give up all previous gains this week, closing at $2,321.64/oz this week, down 0.45% on a weekly basis.
What happened to gold prices this week?
After a quiet start to the week, gold prices broke out of a narrow trading range on Thursday and climbed to a two-week high above $2,360/oz. However, the continued strength of the US dollar before the weekend caused gold prices to give up gains. Investors will continue to pay attention to geopolitical headlines and key data released by the United States next week.
The benchmark 10-year Treasury yield edged higher on Monday after falling last week as Federal Reserve officials took a cautious approach to easing policy, which helped gold prices fall by $13 on Monday. Minneapolis Fed President Neel Kashkari said over the weekend that it would be a "reasonable forecast" that the Fed would wait until December to cut interest rates, adding that the Fed is in a very good position to get more data before making any decision. In addition, Philadelphia Fed President Patrick Harker noted that the Fed may need to keep interest rates unchanged for longer than the market currently wants.
Disappointing macroeconomic data released by the United States on Tuesday made it difficult for the dollar to gather strength and helped gold prices rise by nearly $10. The U.S. Census Bureau reported that retail sales rose just 0.1% in May, while retail sales excluding autos fell 0.1%. Both data were below market expectations.
Gold did not move significantly in either direction and closed the day little changed as U.S. markets were closed on Wednesday and trading volumes were reduced.
Geopolitical tensions escalated again on Thursday amid reports that the Israeli military approved an offensive on Lebanon and said it was ready to launch an "all-out war" in response to increasing cross-border fighting. Gold prices also gained bullish momentum, rising to a two-week high above $2,360 an ounce. Meanwhile, data from the United States showed that initial jobless claims fell slightly to 238,000 in the week ending June 15 from 243,000 in the previous week.
Gold closed up $31.74, or 1.36%, on Thursday.
On Friday, the dollar remained resilient against other currencies on the back of optimistic data, causing gold prices to give up Thursday's gains. The initial S&P Global Manufacturing PMI for June in the United States rose to 51.7 in June from 51.3 in May, while the initial Services PMI rose to 55.1 from 54.8, indicating that private sector business activity is continuing to expand at a strong pace.
Gold closed Friday's session down $38.29, or 1.63%, at $2,321.64 an ounce.
US PCE inflation data could ignite next week's rally
The US economic calendar will not release any high-impact data that could have a significant impact on gold in the first half of next week. As a result, investors will continue to focus on headlines surrounding the conflict in the Middle East. A further escalation in geopolitical tensions could give gold a bullish momentum.
On Thursday, the Bureau of Economic Analysis (BEA) will release final first-quarter gross domestic product (GDP) data. On Friday, the BEA will release May data on the personal consumption expenditures (PCE) price index, the Federal Reserve's preferred inflation indicator.
Investors are likely to react to core PCE inflation data, which excludes volatile commodity prices such as food and energy and is not distorted by base effects. In April, the core PCE price index rose 0.2% month-on-month. If the May data is 0.2% or lower, it could reignite expectations for a Fed rate cut in September and lead to selling pressure on the dollar. On the other hand, if the data reaches 0.3% or higher, it could trigger a rebound in U.S. Treasury yields and force gold prices lower by the end of next week.
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Technical aspect: The trend of gold this week is as thrilling as a roller coaster. Driven by the optimism at the beginning of the week, the price of gold has been rising all the way. On Thursday, it broke through the resistance and rose by more than 1%, hitting a high of $2,360 at one point, setting a new record in nearly two weeks. However, this upward trend encountered strong resistance on Friday. The unexpectedly strong US PMI data showed a boom in manufacturing and service industry activities in June.
The market therefore expected strong economic growth in the second quarter. This news was a heavy blow to gold. The price of gold plunged sharply on the market, once falling below the key support level of $2,320, and finally closed at $2,321, ending two consecutive weeks of rising momentum.
H4: XAUUSD continued to fall with negative lines, directly wiping out the gains of this week, and the price returned to the position near 2320; the lower track support of BOLL is the support here at 2305-2300; the continuous decline has not yet completely ended; the central axis pressure position is near 2335; in terms of indicators, the stochastic indicator crosses downward, and the bearish decline continues; next week, there is a high probability that it will be under pressure near 2335, and the short-term support near 2300 will be temporarily supported below, and it is expected to trade in the range of 2300-2340; the short-term focus on the upper side is 2335-2340 resistance, and the short-term focus on the lower side is 2305-2300 support! It is expected to maintain a rebound after the opening of Monday! Trend trading, don't be confused by short-term rebounds! Go with the trend, mainly sell orders!
Strategy: Sell: 2334-37 TP: 2315-10 SL: 2343-2345 (SL is set according to personal habits)
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