24K99 News On Friday (June 28), spot gold closed down 0.05% to close at 2326.31 US dollars/ounce. After the US PCE inflation data was released, it once reached a new daily high of 2339.76 US dollars/ounce at 9:09 Beijing time. It fell by about 0.10% in June, with a cumulative increase of more than 12.78% in the first half of 2024. #黄金收盘 #
COMEX gold futures closed up 0.01% to 2336.9 US dollars/ounce, with a cumulative increase of 12.8% in the first half of the year; COMEX silver futures closed up 0.61% to 29.435 US dollars/ounce, with a cumulative increase of 22.52% in the first half of the year.
(Spot gold chart, source: FX168)
[Market News Analysis]
Gold investors may want peace of mind, as gold is on the sidelines and doesn't seem to explode anytime soon. However, despite the neutral price movement, analysts seem optimistic as long-term fundamentals continue to support the price.
Gold continues to trade in a fairly narrow range, with solid support at $2,300 per ounce and initial resistance at $2,350. Analysts also pointed out that the broader resistance level is at $2,400 per ounce.
Michele Schneider, chief strategist at MarketGauge.com, said, “Gold is on the sidelines, but risks are biased upward. Inflation will not go away, geopolitical tension will not ease, and government deficits are growing. This provides solid support for gold.”
Earlier, the US core personal consumption expenditure index showed a moderate rise in inflationary pressure, in line with expectations. Over the past 12 months, the Federal Reserve's inflation index rose 2.6%, the lowest annual increase in more than three years.
Although the inflation rate has yet to reach the Fed's 2% target, some analysts say the target is close enough to indicate that the Fed will cut interest rates in September.
David Morrison, senior market analyst at Trade Nation, said that after two months of consolidation, the gold price trend looks very attractive, especially when inflationary pressure seems to ease further.
David Meger, head of alternative investments and trading at High Ridge Futures, said: “Inflation continues to slowly decline. As a result, we have seen yields continue to decline and bond prices to rise, which has a certain supporting effect on the gold market.”
According to the Chicago Mercantile Exchange's FedWatch tool, traders currently expect the possibility that the Fed will cut interest rates in September to be about 68%, compared to 64% before the inflation data is released.
San Francisco Federal Reserve Bank President Mary Daly — who is also a 2024 FOMC member — said the latest inflation figures are “good news that policies are working.”
Chris Gaffney, president of EverBank Global Markets, said, “The price of gold has been trading in a fairly narrow range and is likely to remain in this range until the Federal Open Market Committee confirms that interest rates will be cut.”
According to a recent report by Georgette Boele, senior economist at ABN AMRO, investors should be cautious about gold as drivers diverged and traditional relationships broke down, and the price of gold lost momentum.
In the latest gold price forecast released on June 27, Boele mentioned her April 15 forecast entitled “There seems to be no limit to the price of gold.” “Since then, the price of gold has reached a new high, but the rally has lost momentum,” she pointed out. “What are our expectations for gold prices for the rest of the year? We explore this issue in a similar manner through question-and-answer.”
She wrote, “The market is already expecting the major central banks to start an easing cycle for some time. Although the ECB began implementing an easing policy in June, we think the Federal Reserve will start later (currently the first rate cut is expected to be in September). In fact, expectations for US monetary policy easing have declined this year. Therefore, from this perspective, the price of gold should go lower, not higher.”
“Does the real yield in the US support the price of gold? “No,” she said. “The real US yield is the yield on US Treasury bonds revised by inflation expectations. The high real rate of return indicates that the market believes that the central bank is taking appropriate action to curb inflation. In fact, as US inflation remains high, the Federal Reserve has been waiting to begin easing monetary policy.”
Boele said that if the real yield in the US falls, the price of gold will usually rise, and vice versa. “However, that relationship has broken down this year,” she said. “The real yield in the US is rising, and so is the price of gold.”
Another factor supporting the price of gold is the shortage of physical gold. Boele once again gave a negative answer.
“There was a shortage of physical gold during the COVID-19 pandemic. “As a result, there is a high demand for gold in the futures market, and the premium for buying physical gold is also high,” she pointed out. “Speculative positions have increased so far this year, but the premium for gold coins (Eagle and Maple Leaf) is below its long-term average (albeit positive). Some other coins have negative premiums, so the price is far below the price of spot gold.” “Overall, there is no shortage based on these factors,” she said.
[Focus on financial data and events next week]
Monday: ISM manufacturing PMI
Tuesday: Eurozone CPI estimates, JOLTS vacancies, ECB President Christine Lagarde and Federal Reserve Chairman Jerome Powell will speak at the Bank of Portugal meeting
Wednesday: ADP employment data, weekly unemployment claims, ISM services PMI; FOMC June meeting minutes
Friday: US Nonfarm Payroll Report