SMM News: Wednesday (May 29) early trading in Asia, international spot gold is located in the $1280.00 / ounce region. Gold suffered a massive sell-off on the last day of trading, gold prices fell sharply, hitting as low as $1275.96 an ounce, since then the shock rose, this trading day is now further extended the rally.
(spot gold 60 minutes source: FX168 Financial Network)
Us economic data released on Tuesday were mixed, with the Conference Board's consumer confidence index hitting its highest level since November 2018, while the house price index underperformed expectations, sending the dollar volatile higher and gold tumbling more than $10 in the short term. Market analysts believe that a rebound in risk sentiment, news of the BIS and Venezuela selling gold reserves, and a stronger dollar have all put downward pressure on gold.
John LaForge, head of physical asset strategy at Wells Fargo (Wells Fargo), said the price of gold was no longer attractive judging by its response to recent economic events. Gold's complacent response to market volatility is not in line with the characteristics of safe-haven assets. For investors, there are better defensive assets to choose from. For now, however, the target price forecast for gold of $1300 an ounce has been maintained.
At present, the dollar index has maintained a narrow range for the time being. According to the daily chart, the dollar index has broken through the 20-day moving average and is much higher than other major moving averages. However, the MACD green kinetic energy column remains unchanged, and the KDJ random index is flat, suggesting that the dollar is expected to fall into a narrow range of consolidation for a period of time.
On the four-hour chart, the dollar index remains above the main moving average, the MACD red kinetic energy column expands slightly, and the KDJ random index is slightly upward, suggesting that the dollar may still rebound slightly in the short term.
Gold fell sharply on the last day of trading, daily chart, MACD green kinetic energy column looming, KDJ random index slightly higher, suggesting that gold fell or slightly revised rebound. Initial intraday support at the $1270 / oz level, if effectively below that level, will further accelerate the decline. The initial resistance above is still at $1290 an ounce, and if it breaks through, it will continue to rebound.
On the 4-hour chart, gold retreated below the main moving average, the MACD green kinetic energy column remained unchanged, and the KDJ random index was slightly upward, suggesting that the gold short-term decline may be suspended and rest.
Fundamentals are positive:
1. The annual rate of the house price index of S&P/CS20 big cities in the United States in March was 2.68%, lower than the previous value of 3% and the expected 2.8%. The Dallas Fed business activity index was minus 5.3 in May, below the previous value of 2 and expectations of 5.8.
2. At 21:30 Beijing time on Monday, it was reported that the European Union could impose a huge fine of up to $4 billion on Italy because of its 2018 debt problems, and could take action against Italy on June 5. Increased political instability in Europe and increased risk aversion in the markets.
3. The European Parliament election ended on Sunday local time. With the election results of various EU member states coming out one by one, the situation of the European Parliament election is clear: the far right has made gains, and the Green Party has emerged suddenly. Traditional parties across Europe suffered a sharp setback in the election.
4. After British Prime Minister Theresa May announced her resignation on Friday, the British government was not only looking for a new prime minister, but also won the European election over the weekend, winning the Brexit Party just six weeks ago, winning 31 percent of the vote. And 29 members of the European Parliament were returned to Parliament. The party is led by Farage (Nigel Farage), who favours Brexit without an agreement.
Fundamentals are negative:
The May Conference Board consumer confidence index, released on Tuesday, was 134.1, higher than the previous value of 129.2 and expected 130, the highest level since November 2018.
2. The number of initial jobless claims in the United States as of May 18 was 211000, below the previous value of 212000 and the expected 215000, falling for three weeks in a row. Although the number of first-time applicants rose sharply at the end of April, it has recently returned to the low-end range of 200000, meaning that the increase in the number of first-time applicants was only temporary and that the job market remained strong. Unemployment is also close to historic lows, which has spurred a rapid rise in wage growth during the current period of economic expansion.
The minutes of the Fed's (FED) meeting in May show that committee members remained "patient" at this month's meeting, saying interest rates are likely to remain unchanged for a long time to come. At the same time, committee members raised their forecasts for full-year economic growth and said their previous fears of an economic slowdown had eased. The minutes of the meeting as a whole sent a signal of optimism, which was good for the dollar and bad for precious metals.
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