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Foreign investors reduced their purchases of Japanese government bonds by 46.2 billion yen in the week ending December 19, compared to 1.4075 trillion yen in the previous week.Japans purchases of foreign stocks in the week ending December 19 amounted to -204.5 billion yen, compared to -79.2 billion yen in the previous week.Japan purchased 103 billion yen in foreign bonds in the week ending December 19, compared with a revised figure of 355.8 billion yen in the previous week (originally 356.4 billion yen).Foreign investors net outflowed 1,234.8 billion yen from Japanese stocks in the week ending December 19, compared with a revised figure of 214.2 billion yen in the previous week (originally 528.3 billion yen).1. US Treasury yields fell across the board. The 2-year Treasury yield fell 2.45 basis points to 3.506%, the 3-year Treasury yield fell 2.23 basis points to 3.558%, the 5-year Treasury yield fell 1.92 basis points to 3.718%, the 10-year Treasury yield fell 2.73 basis points to 4.136%, and the 30-year Treasury yield fell 2.94 basis points to 4.795%. 2. International precious metals futures were mixed. COMEX gold futures closed down 0.01% at $4,505.4 per ounce; COMEX silver futures closed up 1.04% at $71.875 per ounce, continuing to set new historical highs. 3. The WTI crude oil futures contract closed up 0.03% at $58.4 per barrel, while the Brent crude oil futures contract closed down 0.05% at $61.84 per barrel. 4. London base metals traded mixed. LME copper rose 0.6% to $12,133/ton, LME zinc fell 0.23% to $3,086.5/ton, LME nickel fell 0.5% to $15,660/ton, LME aluminum rose 0.6% to $2,956.5/ton, LME tin fell 0.71% to $42,490/ton, and LME lead rose 0.86% to $1,999.5/ton.

Gold Price Forecast — Gold Prices Held Steady Despite Risk-Averse Market Sentiment

Alina Haynes

May 19, 2022 10:43

Despite the decrease in yields, gold prices remained relatively unchanged. The dollar rises to levels not seen in two decades as investors put dollar-bearing wagers. As investors flocked into bonds in response to the sell-off in equities, benchmark rates lost ground.

 

The Dow Jones and Nasdaq had significant daily drops as inflation fears increased in response to earnings announcements. Today, the yield on ten-year bonds fell by 9 basis points.

 

In April, residential dwelling starts decreased by 0.2% due to higher mortgage rates. The 30-year loan rate rose to 5.3% last week, up from 2.94 percent a year ago. Inflationary spirals and high material costs have weighed on the housing market.

 

Harker, president of the Philadelphia Fed, predicted that the Fed will implement two 50-basis-point rate hikes in June and July during FOMC meetings.

Technical Evaluation

In light of expected Fed rate hikes, gold prices will stay range-bound. Gold prices are experiencing downward momentum approaching the 1,800 level and are going toward $1780, which was near the trading session's low.

 

Near the 16 May lows near 1788 is viewed as support. The prior support level around the 200-day moving average of 1,838 represents resistance.

 

Short-term momentum becomes negative as the Fast Stochastic may imply a sell crossover. As the fast stochastic displays a value of 22.22 below the oversold threshold of 20, prices remain oversold.

 

As the MACD produces a crossover sell signal, medium-term momentum has gone negative. This occurs when the 12-day moving average minus the 26-day moving average crosses below the MACD line's 9-day moving average.

 

The trajectory of the MACD (moving average convergence divergence) histogram is negative, indicating falling prices.

  

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