Gold prices have risen slowly, but they are expected to lower their flags at present
"Gold Price Rises Slowly, Beware of Descending Flag Pattern" 26/6 9:52 am Completed
Federal Reserve Chair Powell attended the second day of the House Financial Services Committee hearing. Regarding monetary policy, Powell said that if stagflation occurs, it will put the authorities in a difficult position, although this is not the basic expectation, the Federal Reserve will closely monitor it. He also said that the uncertainty of tariffs reached a peak in April, and inflation expectations have declined compared to April this year. In addition, he said that fiscal policy may push up inflation, while monetary policy does not consider debt issues, and that the changes in the authorities' predictions partly reflect the impact of trade policies. He also said that a reasonable expectation for tariffs is that they will bring a certain degree of inflationary pressure.
The US economy is still growing at present, the labor market is stable, and inflation is at a relatively good level. The current interest rate is slightly tight. My understanding is that he believes tariffs put upward pressure on inflation, but not as much as previously expected. A slightly tight interest rate has a certain inhibitory effect on the inflation rate (is there room for adjustment?). The Federal Reserve may cut interest rates in July, but it still depends on the performance of recent data. SPDR has reduced its gold holdings for the second consecutive day. Tonight, the US will release a series of economic data. The most watched is the May durable goods orders, which are expected to increase by 8.6% month-on-month; and the May goods trade balance, which is expected to show a $86.3 billion deficit.
The final GDP figure for the first quarter will also be released tonight, with expectations remaining at a 0.2% quarter-on-quarter contraction after annualization. The first-quarter PCE will also be released, with expectations for core PCE to rise by 3.4% quarter-on-quarter. However, as both the GDP and PCE data are quarterly, their impact on the market is relatively low. Regarding gold prices, SPDR Gold ETF reduced its holdings by 2.29 tons yesterday, bringing the total holdings down to 953.39 tons. Gold prices have maintained a rebound trend, with spot gold reaching a high of $3,340 in the early Tokyo market today before slightly retreating. Currently, the expected development of gold prices is diverse (technical pattern). From the hourly chart, if it reaches the 100% Fibonacci extension level, the gold price could reach $3,354; if it breaks through the descending trend line of the triangle, the measured upward target is $3,385, which would break through the top of the large bearish candle on June 24th at $3,371, forming a breakout signal and leading to a strengthening of gold prices. $3,354 could be a key turning point. However, investors should be cautious that gold prices may be forming a descending flag pattern. If it continues to rise slowly and is clearly blocked and falls back at $3,354, the possibility of this pattern increases.
On the other hand, if the gold price breaks through $3,312, the upward trend of each wave being higher than the previous one since June 24th will be broken. Additionally, if the decline from the peak of $3,393.55 on June 24th reaches the 100% Fibonacci extension level, based on the current morning high of $3,340, the target for the decline would be $3,242.
The above content is for reference only and does not constitute investment advice. MTF Special Analyst Zheng Guangfu
Previous Article Next Article