On Monday (June 17th), affected by the rise in US Treasury bond yields and investors waiting for more US data and Fed officials' speeches this week to obtain more clues about the currency policy outlook. Spot gold fell 0.7% to $2,317.08 per ounce.
After a sharp decline last week, the yield on the 10-year US Treasury bond rebounded on Monday, reducing the attractiveness of non-interest-bearing gold to investors. Currently lacking new significant fundamental news in the market, investors are looking for direction from external markets until the next major fundamental catalyst emerges. The speeches of the Fed officials this week may have a certain impact. Philadelphia Federal Reserve Bank President Harker said Monday that if his economic forecasts were realized, the Fed would cut interest rates once this year. Prior to this, Minneapolis Federal Reserve Bank President Kashkari said on Sunday that it was a "reasonable prediction" that the Fed would cut interest rates once this year, but not until December. Traders are currently closely watching the speeches of New York Fed President Williams and Fed Director Cook later this week. If the Fed officials still insist on a hawkish attitude of only cutting interest rates once this year, it may exert some pressure on gold. In addition, the retail sales data announced on Tuesday, the weekly unemployment claims numbers on Thursday, and the preliminary purchasing managers' index (PMI) on Friday may provide more information on consumer and economic strength. If the data performs strongly, it will echo the hawkish attitude of Fed officials, which will also have a negative impact on gold.
Source: E-huitong
Technically, on the daily chart, a head-and-shoulders pattern appears to have formed, and the gold price outlook is neutral to bearish. Currently, the gold price is trading below the 50-cycle index moving average line (EMA), and the relative strength index (RSI) has fallen further into the put area, supporting bearish expectations. If the gold price falls below $2,300/ounce, the first support level will be the May 3 low of $2,277/ounce, followed by the March 21 high of $2,222/ounce. If gold falls below these levels, there is further downside potential. If gold is to rebound, the first condition is to rebound and break through the June 7th cycle high of $2,387/ounce.
Wang Gang, Bank of China Guangdong Branch
For personal views only, not representative of the views of the organization.