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Kremlin: US-Russia relations are in dire straits, but Moscow hopes that relations can begin to recover as progress is made on the Ukraine issue.On December 18th, ING analyst Carsten Brzezic pointed out that the European Central Bank (ECB) is unlikely to change its current policy stance in the near future. He stated that interest rates have remained unchanged for over six months, indicating that the ECB will not begin cutting rates unless there is a significant decline in inflation or economic growth. "Inflation forecasts, in particular, further confirm the ECBs current policy stance is correct." Due to a slower-than-expected decline in services sector inflation, the ECB slightly raised its 2026 inflation forecast to 1.9%. "Given that inflation expectations remain at or slightly below 2%, and economic growth is expected to be close to potential growth levels, there is no reason for the ECB to change its policy stance in the short term."Statement Section: 1. Interest Rate Decision: The deposit facility rate remained unchanged at 2%, in line with expectations, marking the fourth consecutive meeting without change. The main refinancing rate and marginal lending rate remained unchanged at 2.15% and 2.40%, respectively. 2. Inflation Outlook: Inflation is projected to be 2.1% in 2025, 1.9% in 2026, 1.8% in 2027, and 2.0% in 2028. (September forecasts were 2.1%, 1.7%, and 1.9%, respectively) 3. Voting Results: The interest rate decision was unanimously passed. 4. Economic Outlook: GDP growth is projected to be 1.4% in 2025, 1.2% in 2026, 1.4% in 2027, and 1.4% in 2028. (September forecasts were 1.2%, 1.0%, and 1.3%, respectively) 5. Policy Outlook: No specific interest rate path was pre-committed, and all tools are prepared to be adjusted at any time. Lagardes Press Conference: 1. Economic Outlook: The economy is resilient. 1. **Services-led growth will continue in the near term.** Trade tensions have eased. 2. **Inflation Outlook:** Underlying inflation remains consistent with the 2% medium-term target. Forward-looking indicators suggest wage growth will slow. Inflation should decline in the near term. 3. **Interest Rate Outlook:** The ECB is well-positioned. No rate hikes or cuts were discussed today. All options should be on the table. 4. **Other Matters:** Given the uncertainty, we are simply unable to provide forward guidance. There is no preferred candidate for ECB President. Executive Board member Schnabel is one suitable candidate. 5. **Market Reaction:** The money market is pricing in a 45% probability of an ECB rate hike by March 2027, up from 35% before the statement was released.The European Central Bank expects inflation to be below 2% in the first quarter of 2026, the third quarter of 2026, and the fourth quarter of 2027.The European Central Bank projects wage growth of 4% in 2025, 3.2% in 2026, 2.9% in 2027, and 3% in 2028.

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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