SMM News: on Wednesday, the international gold price fell slightly, as the strong performance of US retail sales data encouraged the dollar to strengthen, but the market's expectation of the Fed's interest rate cut and doubts about the global trade situation limited the gold price's decline.
Spot gold fell 0.05 per cent to $1405.60 an ounce at 15-16 Beijing time, while the dollar index rose 0.02 per cent to 97.383, according to Huitong Finance and Economics software.
Brian Lan, executive director of dealer Gold Silver Central, said: "Gold prices fell slightly yesterday in strong US data, but we still expect the Fed to cut interest rates. The global trade dispute is not nearing the end of the settlement, and many central banks continue to buy gold, which has supported the price of gold. "
The dollar index rose after the release of US retail sales data in June, making gold less attractive. But the data did little to change the market's bets that the Fed would cut interest rates this month.
In his speech on Tuesday (July 16), Federal Reserve Chairman Powell reiterated that he would "take appropriate action" to maintain the expansion of the US economy. His remarks confirmed current expectations of a rate cut.
The Fed Watch tool of the CME Group shows that the trend of interest rate futures still reflects the possibility of a 25 basis point cut this month by 100 per cent and a 50 basis point cut by more than 30 per cent.
"the world's leading central banks will launch new stimulus packages in the second half of the year, and gold's bullish outlook remains good, with short-term resistance at $1500 an ounce," Edward Moya, senior market analyst at OANDA, said in a research note. "
U.S. president Donald Trump tweeted on Monday that China's growth in the second quarter was the slowest in 27 years. Thousands of companies are leaving China, so China is keen to reach a trade deal with the United States.
Chinese Foreign Ministry spokesman Geng Shuang responded on Tuesday (July 16) that this was completely misleading. Reaching an economic and trade agreement is by no means a unilateral demand of the Chinese side, and the United States also has this demand. People from all walks of life in the United States and consumers are strongly opposed to raising taxes on China.
SPDR Gold Trust, the world's largest gold listed trading fund, lost 0.15% of its gold holdings on Tuesday from Monday, from 800.54 tons to 799.37 tons.
Spot gold needs to break $1415 in the short term
Given the complexity of the wave shape, the spot gold upward d wave ended at $1427, and since then the start of the shock downward e wave may also be nearing its end. Both the d wave and the e wave are sub-waves of the adjusted (iv) that have been on since $1439.
Then the gold price will start the upward (v) wave trend, above the recent resistance to see $1415 and $1435 (the previous high line formed by the downward trend pressure line).
The (iv) and (v) waves are the subwaves of the upward (iii) waves that have been opened since $1266. The 100 per cent target of the (iii) wave sees $1453.
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