On Thursday, June 13th, spot gold fell more than 1%, closing at $2,303.18 per ounce.
Due to a decrease in energy costs, US producer prices unexpectedly fell in May. Specific data shows that after the overall Producer Price Index (PPI) rose 0.5% month-on-month in April, it fell 0.2% last month. The core PPI was flat month-on-month, growing 0.5% in April. Combined with the weak CPI data released on Wednesday, it indicates that US inflation has eased off after soaring in the first quarter. However, gold failed to recover and rose under the influence of the bullish data this week and instead fell, indicating that profit-taking pressures remain high. This is mostly due to the hawkish stance taken by the Fed's decision-making committee on the rate cut event on Wednesday. The Fed maintained interest rates on Wednesday and expects to cut them only once in 2024, despite some progress being made in inflation, as economic growth and unemployment remain better than what the Fed believes is a sustainable long-term level. Under the influence of the Fed's hawkish attitude, the US dollar remained strong on Thursday, and gold also failed to escape the trend of profit-taking and fell. However, pricing in the currency market shows that traders have increased their bets, raising the range of the easing policy that the Fed will adopt before the end of this year to 50 basis points, that is, two interest rate cuts of 25 basis points each (FedWatch, a federal monitoring tool, showed the range was 40 basis points before the PPI data was released). Going forward, it remains to be seen which of the two divergent views, the Fed's attitude or market expectations, will ultimately be confirmed and prevail.
Source: E-huitong
Technically, the price of gold rose and fell on Wednesday, falling below all short-term moving averages on Wednesday and continuing to show a downward trend on Thursday. Short-term bearish signals have increased, and short-term support is inclined to test the lows of last week around 2287 and May 3 around or near the 2277 support level, with a risk of falling to the 100-day moving average of 2225.91 in the medium term. Pay attention to the resistance near the 10-day moving average of 2325.84 above, if it unexpectedly recovers that position strongly, it will weaken the bearish signal for the future.
Wang Gang, Bank of China Guangdong Branch
For personal views only, not representative of the views of the organization.