On Tuesday, June 18, spot gold rose by 0.4% to close at $2,329.16 per ounce. The US retail sales data announced on Tuesday fell short of expectations, reinforcing hopes of interest rate cuts by the Federal Reserve this year, and pushing down the dollar and US bond yields. Gold received a slight rebound in response.
According to the US Bureau of Statistics on Tuesday, retail sales in May increased by 0.1%, while economists surveyed by Reuters expected a growth of 0.3%. Tuesday's retail sales data showed signs of fatigue among US consumers. The slowing trend of retail sales growth and rising prices and interest rates have forced households to prioritize essential living expenses and reduce discretionary spending. The tightening financial conditions designed by the Federal Reserve seem to be finally putting pressure on household budgets this year. The disappointing retail sales report increases the possibility of the Federal Reserve starting to cut interest rates in the coming months. Federal funds rate futures indicate a 67% likelihood that the Federal Reserve will cut interest rates at least once before the end of September, up from 63% one day earlier. New York Federal Reserve President Williams said on Tuesday that rates will gradually decline over time, but he refused to disclose when the Federal Reserve can start relaxing monetary policy. According to an annual survey conducted by the World Gold Council (WGC) on central banks worldwide, the percentage of respondents who expect to increase gold reserves within 12 months is the highest ever. The survey also stated that despite the high price of gold, macroeconomic and political uncertainty continues, and more central banks plan to increase their gold reserves within a year, and more central banks expect to join the camp of increasing their gold holdings as reserves. This shows that gold is still considered a good asset for long-term investment.
Source: E-huitong
Technically, on the daily chart level, the short-term spot gold is still in a downward flag consolidation, and the short-term gold price is still under pressure below the middle line of the Bollinger Band channel (around $2,340), and the weak downward trend has not yet improved. Overall, gold is still oscillating in a wide range, with the oscillation range concentrated between $2,270 and $2,400.
Wang Gang, Bank of China Guangdong Branch
For personal views only, not representative of the views of the organization.