Daily Gold Talk | This Week's Market Storm Center May Be Tonight's Major Data

On the fundamentals, despite the mixed U.S. housing data released on Wednesday and a decline in consumer confidence, the market has clearly ignored these weak signals and instead focused on the Federal Reserve's hawkish monetary policy outlook. The Federal Reserve's tough narrative has replaced the weak data; with the new Fed Chair Walsh officially taking office, his strong anti-inflation stance has quickly taken over market expectations. Coupled with several officials emphasizing that inflation takes precedence over employment, the market has completely erased any expectations of a rate cut this year, and is even pricing in about a 40% probability of a rate hike by the end of the year.

Driven by this, the yield on the 10-year U.S. Treasury note has stayed above the 4.5% high, the U.S. Dollar Index remains strong above the 99 level, significantly increasing the opportunity cost of holding the non-interest-bearing asset—gold—and forcing bullish funds to exit. Meanwhile, the transmission mechanism of geopolitical risks has undergone subtle changes, and the Middle East situation has led to an awkward scenario where the more chaotic it becomes, the more prices fall.

From a technical perspective, international gold prices are currently running around the key bulls-and-bears watershed of $4,517 per ounce this week, and are under pressure from multiple moving averages, indicating that bears currently have a significant advantage in the market. On the downside, support is focused near $4,381 per ounce; if this level is effectively breached, support may be adjusted to near $4,308 per ounce. On the upside, resistance is at the watershed near $4,517 per ounce; if this level is effectively broken, resistance will be raised to around $4,580 per ounce.

Editor | Jiao Yang   Layout | Jiao Yang   Visuals | Zhang Zongwei 

Proofreading | Wang Bei   Review | Ni Jinhe