On Wednesday (July 24th), spot gold closed at $2,397.58 per ounce, down 0.52%. It rose to $2,431.89 during trading. Despite facing some important data later this week, gold remains firmly around $2,400. In terms of product structure, the operating income of 10-30 billion yuan products are 401/1288/60 million yuan, respectively.
It is well known that this week will also announce the second quarter GDP of the United States and the PCE data reflecting inflation, but gold remains stable in the high area. This is mainly because the market is confident that the Fed will open the gate of interest rate cuts in September, and gold is therefore well supported. According to CME's "Fed Watch" data, the probability that the Fed will maintain interest rates unchanged in August is 93.3%, and the probability of a 25 basis point rate cut is 6.7%. The probability that the Fed will maintain interest rates unchanged until September is 0%, and the cumulative probability of a 25 basis point rate cut is 89.6%. As the market priced in a Fed rate cut in September, ICE U.S. Dollar Index fell 0.09% to 104.357 points at the close in New York. The two-year US Treasury yield fell more than 8 basis points, and the yield curve trended steeply. Former New York Fed Chairman (with permanent voting rights on the FOMC, known as the "third hand of the Fed") Dudley wrote, "I've long been in the camp of "keeping rates high for a longer time", and I believe that keeping short-term rates at or above current levels is necessary to control inflation. However, times have changed, and now I've changed my mind. The Fed should cut interest rates and ideally begin next week's rate meeting." Looking ahead, Kitco Metals senior market analyst Jim Wyckoff said, "The weakness of the U.S. dollar, the decline in U.S. stock index prices, and the rise in crude oil prices" support gold buying interest. Investors are looking for clues on the Fed's interest rate cut path from the second quarter GDP report and June personal consumption expenditure data to be released in the United States on Thursday and Friday, respectively. If the data doesn't shine, it will further solidify the market's expectation of an interest rate cut by the Fed before September. This is undoubtedly beneficial for gold to continue to climb. In addition, according to the latest report from the World Gold Council, it is less than four months before Americans vote for a new president. Uncertainty is increasing, which will continue to support demand for gold as a safe haven. The World Gold Council said that this uncertainty and geopolitical volatility may continue to support the price of gold. Historically, the U.S. election has not been seen as a geopolitical risk, but the world and American voters are still highly polarized. This in turn highlights the need for investors to have strong hedges in their investment portfolios, and gold can effectively play this role.
Source: E-huitong
Technically, the upward bias has not yet changed, as the gold price is still above the midline of the Bollinger Band channel on the daily chart, and the relative strength index RSI remains above the neutral line of 50. Although the MACD indicator has shown a death cross, it shows some signs of recovery above its red signal line. If long positions break through 2438, the price may initially move towards the peak of 2449 points in May, followed by the resistance level of 2467 points. If the price continues to rise, gold may break through the historical high of 2,483 points. However, if it encounters short position sniper and the price is pushed down to 2410 Fibonacci retracement level and below the 20-moving average, the lower support level may come to 2388, which is the 50% Fibonacci retracement level (the price touched the bottom there earlier this week). From there, further decline may face stronger support near the 200-day moving average and the 61.8% Fibonacci level from the February low (currently near 2,366).
Wang Gang, Bank of China Guangdong Branch
For personal views only, not representative of the views of the organization.