On Friday (June 21st), gold fell 1.6%, closing at $2,320.82 per ounce. Last Friday, data released in the United States showed that US business activity was strong, which hammered gold, causing it to significantly pull back from its high point last Thursday.
Last week, the US data had ups and downs: the released US retail sales data was weak, but industrial output and manufacturing PMI data were strong, initial jobless claims and housing market data were satisfactory. On Friday, the strong data of June's business activity hitting a 26-month high was announced. The frequent changes in the economic data of the United States make it difficult for investors to determine the next step of the Fed, and market uncertainty remains high. This situation is expected to continue for a period of time in the near future. Similarly, there is a heap of US economic data this week (Consumer Confidence Index on Tuesday, US New Home Sales Index on Wednesday, Q1 Domestic Product Final Value, weekly jobless claims, core durable goods and US pending home sales index on Thursday, PCE Price Index, personal income, and spending on Friday). It is believed that the impact on the precious metal market will be similar to that of last Monday. In addition to economic data, a report by the Fed this week may become a "dark horse" affecting the market. This is the annual bank stress test results announced by the Fed on Wednesday in New York time (4:30 on the 27th Beijing time). Because the high interest rates of the Fed have brought significant pressure to banks, this report may cause the market to be particularly concerned. If the results show that the proportion of compliant banks is high, it may trigger concerns about the Fed delaying the interest rate cut, which will then suppress the price of gold and other non-US assets. If the stress test results show that a large proportion is at risk, it may trigger predictions that the Fed will cut interest rates as soon as possible, and help to boost the price of gold and other non-US assets.
Source: E-huitong
Technically, looking at the 4-hour chart, gold fell rapidly from $2368.62 to the $2321 line, almost dropping from the upper edge of the recent rebound channel to the lower support line. If it falls below the lower support, the nearby support is also relatively concentrated, paying attention to 2310-2305, 2300-2295, and then 2286. If there is no major bearish news, it is expected that the gold price will not fall below 2286 temporarily. The current initial resistance needs to pay attention to 2329-2331, then see 2336, 2345, 2350, and then the range of 2356-2368. If there is no major bullish news, the probability of gold rising above 2387 this week is small. Overall, the price of gold should be out of the main fluctuation range of 2300-2370 this week.
Wang Gang, Bank of China Guangdong Branch
For personal views only, not representative of the views of the organization.