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Market News Gold market analysis: Lagarde detonated the currency market, gold quickly rose to 1865

Gold market analysis: Lagarde detonated the currency market, gold quickly rose to 1865

If the market wants to continue to rise, it must effectively break above 1865, and once it falls below 1843, the rising market may be interrupted, and it is estimated that it will go to 1835-1826 or even around 1810.

2022-05-24
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On Monday (May 23), as the U.S. dollar fell about 0.9% against a basket of major currencies, spot gold continued to gain support and had a rapid rise to $1,865 an ounce during the day, a slight increase of 0.41% throughout the day.



The current Russian-Ukrainian war is still not out of sight, the International Monetary Fund has warned of worsening inflation, and the global economy is facing its biggest test since World War II. Before the opening of the World Economic Forum (WEF) in 2022, George Ava, President of the International Monetary Fund (IMF), said that the Russian-Ukrainian war has destroyed people's lives, dragged down economic growth and worsened inflation, and the global economy is facing "the biggest test since World War II. ". Earlier this week, the Biden administration said it was considering using emergency diesel reserves to curb supply shortages and rising fuel prices. In addition, White House economic adviser Diess said on the 22nd that the U.S. economy may fall into a recession, but compared with other parts of the world, the United States is still performing well, the economy is in transition, and there is a better chance of a soft landing. While the Biden administration has tried to calm markets, Morgan Stanley and Bridgewater warned that it was too early for investors to turn bullish on stocks as growth risks are only just emerging. In the foreign exchange market, as the European Central Bank Lagarde released the possibility of ending the negative interest rate policy by the end of September, the euro rebounded strongly on the 23rd, hitting a new high in nearly a month, while the dollar index fell more than 1%. Lagarde said that the euro zone deposit rate is expected to get out of negative territory by the end of September, and if inflation continues to stabilize at 2%, the central bank may raise interest rates further. Investors' appetite for riskier assets was greater as Lagarde's comments eased fears of a recession in Europe and a less upbeat outlook for the U.S., a growth gap that could be negative for the dollar. And thanks to a weaker dollar, gold edged up on the 23rd, but gains were restrained by rising U.S. bond yields. U.S. 3-year and 10-year Treasury yields remain relatively high and have been supporting the dollar. Gold has rallied recently as nominal and real yields slipped and the dollar took a break from gains. But looking forward, gold is still in a downward trend, and real yields and the dollar will be the key. If the two continue to climb, it will be difficult for gold prices to stay above $1,800 an ounce.

Gold surged to the top of the 1865 line yesterday, basically reaching the target level. The daily line is closed with a doji, and there is a demand for a fall in the technology of the closing line. The resistance line is 1865, and the high point of the hourly line rebound is near 1859. The lower support fell back to the low of 1847 in the early morning of Tuesday, and the strong support was at 1843. If the market wants to continue to rise, it must effectively break above 1865, and once it falls below 1843, the rising market may be interrupted, and it is estimated that it will go to 1835-1826 or even around 1810.

Personal views only, do not represent the views of the organization

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