Huang Lichen: The Fed’s hawks skipped expectations of interest rate hikes, limiting gold’s rebound | investing.com

Last Friday, we believed that rising U.S. inflation has strengthened hawkish bets on the Federal Reserve and put pressure on gold. However, the Federal Reserve may skip raising interest rates in September, which limits the downside space for gold. Therefore, it is recommended that everyone treat it with a volatile approach and pay attention to the short term. For the direction of breakthrough, the support below will focus on $1,914, a downward breakthrough may continue to test $1,900, the upper pressure will focus on $1,920, and an upward breakthrough may continue to test $1,930.

Judging from the subsequent trend, gold fluctuated in a narrow range between the daily 5-day moving average and the Bollinger Bands to the middle track, that is, 1914 to 1920 US dollars. It was not until after the opening of the US market that the gold price broke through the Bollinger Bands middle track at 1920 US dollars and suppressed it. It rose as high as $1,930 and encountered resistance before falling back to $1,922 before closing. After gold broke through upward, the short-term trend strengthened and tested $1930, which was basically in line with our expectations. At the opening of this Monday, gold fell back to $1,922 and stabilized. It rose to $1,930 and encountered resistance. It is currently trading around $1,920.

Wolfinance star analyst Huang Lichen believes that the inflation report released last week showed that US gasoline prices increased, leading to an increase in the potential upward risk of US inflation, which once suppressed gold and fell to a new low in the past month. However, after the European Central Bank raised interest rates for the tenth consecutive time, , hinting that the tightening policy may have ended, which strengthened the market’s bets that the Federal Reserve is nearing the end of its interest rate hike cycle and pushed gold prices to rebound.

In terms of news, the current market focus is on the Federal Reserve’s interest rate decision on Wednesday (early Thursday morning). Investors expect the Federal Reserve to skip raising interest rates. However, considering the strong performance of the US economic and employment data released in recent times, U.S. inflation remains stubborn and faces greater upward risks. The Fed’s hawks will be more likely to skip raising interest rates, that is, they will not rule out the possibility of further interest rate hikes and hint at keeping interest rates high for a longer period. This makes Gold still faces the risk of a correction.

On the daily chart, gold bottomed out near the integer mark of $1,900, continuously breaking through the 5-day and 10-day moving averages and suppressing the middle track of the Bollinger Bands, easing the short-term downward pressure. The middle track of the Bollinger Bands currently forms short-term support near $1,922. , however, gold continued to rise and encountered resistance near last week’s high of $1,930, limiting the short-term rebound space. The 5-day and 10-day moving averages crossed below the middle track of the Bollinger Bands, but the 5-day moving average turned upward. At the same time, the KDJ and RSI indicators formed a golden cross, and the MACD indicator formed a golden cross below the zero axis, indicating that the gold price is developing towards the short side. Many parties resisted, and many parties gained short-term advantages.

Gold intraday reference: Expectations that the Federal Reserve’s hawks will skip raising interest rates may limit gold’s rebound space and maintain a volatile trend before the interest rate decision. In terms of operation, it is recommended to treat it with a shock idea. The upper pressure should focus on 1930 and 1936 US dollars, and the lower support should focus on 1922 and 1915 US dollars.

author:
Huang Lichen