#黄金技术分析 #24K99讯 On Wednesday (May 30), spot gold plummeted by nearly $25, closing below $2,340 per ounce. Analysts pointed out that in addition to a strong dollar, the sharp rise in US bond yields became another major reason for the fall in gold prices on Wednesday.
Spot gold closed down $23.38, or 0.99%, to $2337.89 per ounce on Wednesday.
FXStreet analyst Christian Borjon Valencia pointed out that on Wednesday, against the backdrop of rising US Treasury yields, the price of gold plummeted. Furthermore, hawkish remarks by Federal Reserve officials boosted demand for the US dollar, which also hurt the price of gold.
FXStreet analyst analyst Sagar Dua pointed out that as investors feared that the Federal Reserve interest rate would remain high for a longer period of time, the price of gold fell sharply to 2,340 US dollars/ounce. The dollar and US Treasury yields rose as traders reduced their bets on the Federal Reserve's interest rate cut in September.
Minneapolis Federal Reserve Chairman Kashkari, who is a hawkish member of the Federal Reserve Policy Development Committee, said on Tuesday that he would like to see more months of data showing an easing in the inflation situation before the Fed takes action to cut interest rates. Kashkari also said that if price pressure rises again, he will not rule out the possibility of further rate hikes.
On Wednesday, US Treasury yields rose for the second day in a row. The 10-year US Treasury yield rose 7.2 basis points to 4.614%, reaching a peak of 4.638%.
The US dollar index closed with a strong rise of 0.5% to 105.14 on Wednesday.
On Tuesday, the US Treasury Department successively auctioned 69 billion US dollars of two-year treasury bonds and 70 billion US dollars of five-year treasury bonds. The overall auction results were poor, and overseas demand was insufficient, causing US Treasury yields to rise that day.
Vital Knowledge analyst Adam Crisafulli said, “As the poor trend in US Treasury prices continued until Wednesday, the stock markets in most major markets were hit.”
Financial blogger ZeroEdge commented, “The two-year US bond auction was terrible, and demand from foreign buyers was very weak, forcing direct bidders and tier-1 traders to step in. As a result, after the auction results were announced, the 10-year US Treasury yield soared to more than 4.50%, reaching the highest level in two weeks. This is not surprising, as market concerns about interest rates being high for a longer period of time have not dissipated.”
On Thursday, the revised US real gross domestic product (GDP) for the first quarter will be released. The annualized quarterly rate is expected to increase by 1.3%.
How to trade gold after a sharp drop?
FXStreet analyst Christian Borjon Valencia pointed out that as mentioned on Tuesday, as the Relative Strength Index (RSI) turned bearish and fell below the 50 midline, “the rebound is showing signs of exhaustion, and the momentum is beginning to subside.”
According to Valencia, the first support level for the gold price will be the 50-day simple moving average (SMA) of $2,321 per ounce. Once it falls below this level, the price of gold will target a low of 2,303 US dollars/ounce on May 8, followed by a cyclical low of 2,277 US dollars/ounce on May 3.
(Spot gold daily chart source: FXStreet)
On the other hand, Valencia added that if the price of gold recovers the psychological barrier of $2,350 per ounce, it is expected to rise further. Next, the target will be the 2,400 US dollars/ounce mark, followed by the high of 2,450 US dollars/ounce so far this year, and finally looking at the 2,500 US dollars/ounce mark.
FXStreet analyst Sagar Dua pointed out that judging from the 1-hour gold chart, the price of gold has fallen below the pattern of falling down the flag. This indicates that the downward trend has resumed after new sellers have entered. The immediate outlook is uncertain as the price of gold has fallen below the 50-period exponential moving average (about $2,350 per ounce). The 14-period RSI has moved into a bearish range of 20.00-40.00, indicating that bearish momentum has been established.
(1-hour spot gold chart source: FXStreet)
Dua said that if the price of gold falls below the low of around $2,320 per ounce on May 24, there will be more room for decline. However, if the price of gold recovers above the May 28 high of $2,365/oz, the bulls will regain their dominant position.