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Market News Gold market analysis: U.S. data mixed

Gold market analysis: U.S. data mixed

Gold rebounded strongly in the US market yesterday, but it was still suppressed by the moving average. Gold began to fall after meeting the resistance of 1870 and fell below the 4-hour moving average support. The current rebound is a confirmation of the previous breakdown. It seems to have a strong rebound but there is no continuity. The pressure of 1850 seems to be difficult to break through now. It will continue to fall.

2022-06-02
7771
On Wednesday (June 1), spot gold continued to rise and refreshed a daily high of $1,849.84, up more than $21 from the lowest point since May 19 of $1,828.31 hit earlier in the day.



Data released on the day showed that the U.S. ISM manufacturing PMI was 56.1 in May, compared with an expected 54.5 and the previous value of 55.4; the U.S. construction spending in April was 0.2% month-on-month, compared with an expected 0.5% and a previous value of 0.10%. The U.S. ISM manufacturing index was higher than expected in May, suggesting that the U.S. economy may be able to cope with the impact of reduced liquidity and rising interest rates, increasing the likelihood that the Federal Reserve will continue to advance its tightening policy. In addition, the labor market remains tight, with more-than-expected job openings in April and an upward revision to the previous month's data. Specific data show that the JOLTs job vacancies in the United States in April were 11.4 million, the expected 11.4 million, and the previous value of 11.549 million. Two-year U.S. Treasury yields and the U.S. dollar rose sharply after the data was released on expectations that interest rates would rise. The U.S. dollar index rose 0.3%, while U.S. Treasury yields also rose. Despite this, spot gold continued its gains and refreshed a daily high of $1,849.84, up more than $21 from the lowest since May 19 at $1,828.31 hit earlier in the day. The underlying theme in the gold market remains worrying about inflation, which could keep the market bottoming and spark more buying interest. There was some short covering in the futures market and a small amount of dips in the spot market after the recent selling pressure. Investors are also eyeing U.S. nonfarm payrolls data and May inflation data for clues on the direction of the economy and the prospect of Fed tightening. Higher interest rates increase the opportunity cost of holding gold. Over time, we expect gold prices to recover mainly led by real yields and remain subdued for a period of time.

In terms of technical graphics, gold rebounded strongly in the US market yesterday, but it was still suppressed by the moving average. Gold began to fall after meeting the resistance of 1870, and fell below the 4-hour moving average support. The current rebound is a confirmation of the previous breakdown. Seemingly strong rebound but no continuity. The pressure of 1850 seems to be difficult to break through at present, and it will continue to fall after encountering resistance. Today's small non-agricultural and weekly jobless claims data are released, and the trend will become cautious before the data. Then we will meet the non-farm payroll data on Friday. If these two days of strong data, it may pose further pressure on gold.

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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