Gold market analysis: Fed hawks continue to speak out, gold fell nearly 1% on the day

Affected by stronger U.S. bond yields, gold prices closed lower on Tuesday (May 31). At this point, the price of gold recorded its second consecutive monthly decline for the first time since March 2021. During the New York session, spot gold prices fell 0.8% to close at $1,842.60.



With U.S. inflation at more than three times the Fed's 2 percent target, the latest polls have led to a surge in the cost of living for Americans. Federal Reserve Governor Waller said on Monday (May 30) that from now on, the Fed should be prepared to raise interest rates by 0.5 percentage points at each meeting until inflation is decisively contained. That underscores the tension the Fed is facing as it tries to rein in upward pressure on prices. Waller's remarks echoed the previous statement by the Fed's hawk representative, St. Louis Fed President Bullard, that he hopes the Fed will raise interest rates to 3.5% by the end of the year, which means that the Fed will raise interest rates every time at all remaining meetings. 0.5 percentage points. Waller said after a speech at the Institute for Monetary and Financial Stability in Frankfurt, Germany: "I advocate for a 50 basis point rate hike at every meeting until inflation is confirmed to have fallen significantly. Until we do that, I don't think there's going to be a stop. Meaning." Waller said he would like to see the Fed raise policy rates above neutral by the end of the year. If there are any signs that inflation will remain high, or that wages continue to rise in the U.S. and the economy is doing well, the Fed is likely to maintain an aggressive rate hike strategy beyond July. But aggressive interest rate hikes by the Federal Reserve have led to heavy sell-off in stocks, and the Russia-Ukraine war has further disrupted supply chains severely disrupted by the coronavirus pandemic, fueling fears of a recession. Whether the supply chain can return to normal as soon as possible is not in the hands of the Fed. Market focus has shifted to the Fed's post-July policy outlook. Some Fed policymakers said they wanted to see how much inflation would fall in the summer before deciding whether to adjust the rate hike in September to give time to assess the impact of the Fed's moves on the economy and inflation. And there are already signs that U.S. inflation has peaked. To this end, the Fed is under heavy pressure on how to decisively reduce inflation without causing a recession. But in any case, in the short term, since the interest rate hike in June and July is expected to be certain, the repressive effect on gold will gradually pour out, unless there is a greater conflict in geopolitics, the gold side may shrink. its downward range.

Technical aspects: From the daily chart, gold is showing a large negative line. The momentum is expected to show an inertial decline on Wednesday, but at the same time 1836 is also a key support position, so it is necessary to observe whether this position breaks through to determine, long and short may be Play the game in this position. Judging from the 4-hour chart of spot gold, the price of gold gradually fell below the short-term moving average, and the double-line MACD indicator also began to send a signal of dead fork change, suggesting that the market outlook may develop downward. Once the above-mentioned support level ($1836) falls below , the market adjustment will deepen, and the lower 1800 mark will be exposed again within the target range.

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Bank of China Guangdong Branch Wang Gang Source: Bank of China official website