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On April 29th, Citigroup Chief Economist Josh Williamson stated that weak core inflation data in Australia during the first quarter masked inflationary pressures stemming from the Middle East conflict. He indicated that high oil prices could increase inflationary pressures, potentially pushing overall inflation to 5.5% by mid-year, while core inflation would reach 3.8%. Williamson added that the Reserve Bank of Australia (RBA) is likely to raise its inflation forecast in May and raise interest rates in May and June, ultimately reaching a rate of 4.6%.On April 29th, Mike Sanders, Head of Fixed Income at Madison Investments, stated in a report that the market will be focused on how Federal Reserve Chairman Jerome Powell describes the committees consensus view on recent inflation and the future policy path, especially as Powells term as chairman is drawing to a close. "With rising oil prices potentially leading to persistently high inflation, investors will want to know as much as possible about the committees view on the balance of risks," he said. He added that the labor market is "okay, but not great," but rate cuts in a high-inflation environment would have a significant impact on the yield curve and the overall economy, while a near-term rate hike is not expected.On April 29th, Priyanka Sachdeva of Phillip Nova stated in a report that oil prices could rise further if maritime transport through the Strait of Hormuz continues to be disrupted. Such disruptions could increase market expectations of tighter supply. She added, "Looking ahead, market focus will likely remain on supply-side dynamics and geopolitical signals from the Gulf region."Geely Automobile (00175.HK) shares rose more than 4% in the afternoon. The company reported a first-quarter profit attributable to owners of the parent company of RMB 4.17 billion, a year-on-year decrease of 27%.April 29th, Futures News: Economies.com analysts latest view: WTI crude oil futures prices have risen slightly in recent intraday trading, with an overall cautious trend. Currently, prices are continuously attempting to break through the key resistance level of $98.00, indicating an intention to continue the current bullish trend. This movement occurred after the Relative Strength Index (RSI) cleared from overbought conditions, bringing new upward momentum to the market, especially with prices consistently trading above the 50-day exponential moving average (EMA50), which provides strong dynamic support. Given the prevailing slightly bullish trend in the short term, WTI crude oil futures prices may still have further upside potential in the near future.

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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