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Nick Timiraos, the Feds mouthpiece, has expressed continued dissatisfaction with Trumps tendency to trigger stock market corrections with any evidence of an overheated economy in economic reports. He reiterated his call for lower interest rates: "The Fed Board and its excellent new leadership must be wise—this time with a bit of patriotism."On September 4th, Douglas Porter, chief economist at the Bank of Montreal, stated that after a period of significantly stronger-than-expected employment data, Canada appears poised for a reality test. He noted that while the August jobs report was undoubtedly weak, it was far from surprising, reflecting in part the continued decline in the labor force. He believes that the slowdown in employment and average wage growth will further reinforce the Bank of Canadas strategy of maintaining unchanged interest rates and help alleviate excessively high market expectations for rate hikes. In August, Canadas overall employment decreased by 41,700, ending a previous series of strong job growth, while the unemployment rate remained unchanged at 6.4%.U.S. Treasury Secretary Bessant: The employment data shows that the (U.S.) economy is not solely driven by the AI construction boom. Canada lost over 40,000 jobs, while our employment data shows a significant increase.September 4th - When inflation is high and the labor market is tight (i.e., there are more job openings than job seekers), employees typically expect higher wages to offset the high cost of living. This is one of the key reasons why the Federal Reserve ensures stable inflation expectations. Fridays jobs report showed that average hourly earnings rose 0.3% month-over-month, while the year-over-year growth rate slowed to 3.1% from 3.2%. A report from Oxford Economics stated, "The Federal Reserve can be reassured that the labor market is not a source of inflationary pressures."U.S. Treasury Department: Latest U.S. sanctions related to Iran target three entities.

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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