Gold market analysis: Without the impact of major events, this week may continue to remain in the range of $1930-1985

Bank of China (601988) Guangdong Branch Wang Gang said that gold is currently focused on the support of 1933/1918 below, and the resistance of 1970/1985/2005 above. Overall, it is expected that without the impact of major events, gold will continue to fluctuate sideways in the range of 1930-1985 this week.

Gold closed slightly higher last Friday (June 16). In late US trading, spot gold closed at $1957.68/ounce, down $0.19 or 0.01%. The highest hit was $1967.92/ounce and the lowest hit was $1953.18/ounce. For the whole week last week, spot gold as a whole closed down $3.15 or 0.16%.

At a time when investors continue to digest the Federal Reserve's decision to keep the base rate unchanged announced on Wednesday, they are confused about the future direction of the Federal Reserve, while gold remains in a range-wide sideways pattern. After the Fed skipped a rate hike last week, two Fed officials jumped out and said that the central bank may have to raise interest rates further to ease price pressures in some industries, which have shown little sign of easing. Fed Governor Paul Waller said on Friday that headline inflation has "fallen by half" since its peak last year, but that prices excluding food and energy have barely changed in the past eight or nine months. "It bothers me," Waller said in a question-and-answer session following his speech in Oslo, Norway. "We're seeing some impact on parts of the economy from policy rates. The labor market remains strong but core inflation is unchanged, which may require more tightening to bring inflation down." At a separate meeting on Friday, Richmond Fed President Barkin said inflation remained "too high" and "stubbornly persistent." Barkin warned that easing policy too soon would be a costly mistake. "I accept that there is a greater risk of a slowdown, but the experience of the 1970s offers a clear lesson: if you stop curbing inflation too soon, inflation will come back, which requires the Fed to do more and do more damage," he said. "I don't want to take that risk." While key Fed officials remain hawkish on whether to stop raising interest rates in the dollar, the current data do not seem to be keeping up with the officials' tone. Friday's latest preliminary data for June from the University of Michigan showed that the one-year inflation forecast for the United States recorded 3.3% in June, the lowest since March 2021 and lower than the 4.2% expected in May. And Powell did not commit to a rate hike in July at last week's press conference, saying the Fed would continue to rely on data. Therefore, whether there will be further rate hikes in July will become more sensitive and important, and investors will need to pay close attention to the data.

From a technical standpoint, the daily line closed a small positive column last Friday, the Bollinger Band shrank, and the price is about to choose a new direction. The KDJ indicator formed a golden fork. The general trend is still upward in the short term, and it maintains a wide range of oscillations. Continue to pay attention to the break situation. Currently, the bottom is concerned about the support of 1933/1918, and the top is concerned about the resistance of 1970/1985/2005. Overall, it is expected that without the impact of major events, gold will continue to oscillate sideways in the range of 1930-1985 this week.

Bank of China Guangdong Branch Wang Gang