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Hang Seng Index futures closed down 1.03% at 25,328 points in overnight trading, a discount of 429 points.March 7th - According to foreign media reports, a growing number of energy industry executives and traders are warning that with each day the war continues, the world is one step closer to a crisis – some predict oil prices could reach $100 a barrel within days. Despite a surge in oil and gas prices this week, they remain well below the highs reached shortly after the outbreak of the Russia-Ukraine conflict. On Friday, the initial calm in the crude oil market dissipated, with international oil prices surging above $90 a barrel. Nevertheless, executives from four major trading firms predict that oil prices could reach $100 within days unless the situation eases. The physical energy market is already showing signs of pressure, with refinery cuts in the Middle East and Asia causing prices for products such as diesel and jet fuel to soar. McNally, president of consulting firm Rapidan Energy Group, said, "Once the market realizes that the closure of the Strait of Hormuz will last for weeks rather than a temporary interruption, we expect Brent crude prices to reach $100 a barrel or even higher in the coming days to weeks."The Israel Defense Forces said it has detected another round of ballistic missile launches by Iran.Google: Anthropic remains available outside of defense work.On March 7th, Cleveland Federal Reserve President Beth Hammark stated on Friday that she believes there is no need to adjust the monetary policy stance in the current economic environment where inflation remains excessively high. In her prepared remarks at the U.S. Monetary Policy Forum in New York City, Hammark said that given the Feds need to balance high inflation and a weak labor market, these factors, coupled with last years interest rate cuts, place current monetary policy in a favorable position, and the central banks interest rate target has a neutral impact on the economy. Hammark stated, "Based on my baseline scenario, I think policy should remain on hold for a considerable period, awaiting evidence of declining inflation and further stabilization in the labor market." She added, "However, its easy to imagine other scenarios, so I think there are two-way risks to interest rates."

June Gold Buyers May Face Difficulties at $1987.60

Larissa Barlow

Apr 14, 2022 10:14

The market's strength is being fueled by demand for a hedge against rising inflation during the Russia-Ukraine conflict, lessening pressure from expectations of an aggressive US interest rate hike, and the US Dollar's intraday reversal top.

 

June Comex gold futures are currently trading at $1982.70, up $6.60 or 0.33 percent from their previous close. The SPDR Gold Shares ETF (GLD) is currently trading at $184.66, up $0.89 or 0.48 percent from its previous close.

 

Gold is regarded as an inflation hedge and a hedge against geopolitical concerns. However, higher interest rates in the United States would increase the opportunity cost of storing non-yielding bullion and strengthen the dollar against which it is valued.

 

However, the price action shows that gold buyers are seeking insurance against inflation and are not very concerned about opportunity costs at the moment. Despite all of the Fed's hawkish rhetoric and anticipation for aggressive rate hikes, we have yet to witness a shift in the direction of inflation.

 

Gold is likely to remain underpinned for the foreseeable future as long as the inflation arrow continues to point upward and the Ukraine war continues.

 

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Technical Analysis of the Daily Swing Chart

According to the daily swing chart, the primary trend is upward. A move over the intraday high of $1985.50 reaffirms the uptrend. A break of $1916.20 will revert the major trend to the downside.

 

On the upside, the retracement zone between $1987.60 and $2009.90 is the nearest objective.

 

On the downside, the long-term Fibonacci level at $1958.70 serves as the initial support, followed by the short-term 50% level at $1932.90.

Technical Forecast for the Daily Swing Chart

The June Comex gold futures market's path through Wednesday's close is likely to be dictated by trader reaction to the 50% level at $1987.60.

Scenario of Bullishness

A sustained move above $1987.60 will signal that buyers are present. This could provide the necessary momentum for a test of the Fibonacci level at $2009.90. This is a trigger point for an upside acceleration.

Scenario of the Bear

A persistent decline below $1987.60 indicates the existence of sellers. They intend to attempt the formation of a secondary lower top. This, if successful, might result in a break into $1958.70.

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