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May 20th - According to Israeli sources on the evening of May 19th local time, despite US President Trumps announcement the previous day to cancel attacks on Iran, Israeli officials assessed that evening that Trump still favored resuming military action against Iran. Furthermore, Israeli sources also stated that joint preparations between Israel and the US for resuming military action against Iran have been completed and are currently awaiting Trumps decision.Citigroup: If the Strait of Hormuz remains closed in early 2027, the oil shock of the 1970s could be repeated.Citigroup: The outlook for oil in 2027 is extremely difficult to predict, but the median forecast is $80-90 per barrel.Citigroup still believes that the oil market is under-pricing "duration risk" and "tail risk".On May 20th, US Vice President Vance stated at a White House press briefing on May 19th that direct negotiations between the US and Iran had made "significant progress" in establishing communication channels and advancing the diplomatic process, but he declined to disclose the specific details of the current behind-the-scenes consultations. Vance stated that the US is still engaged in extensive "back and forth communication" with Iran, and that the negotiations are "making good progress." Vance revealed that he, along with Trumps son-in-law Jared Kushner and Special Envoy Witkov, had previously held lengthy contacts with Iranian officials, primarily with two objectives: first, to rebuild the long-interrupted direct communication channels between the two countries; and second, to lay the foundation for subsequent formal negotiations. He said that the negotiating team was not "very confident" at the time that an agreement could be reached quickly, but believed they could "take an important step towards an agreement," and that this goal has now been achieved.

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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