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Japanese Prime Minister Shigeru Ishiba: The Bank of Japan is implementing various measures to stabilize prices.March 10, Berenberg analysts said that Europes military budget will grow at least in the high single digits by 2035, and at the same time, regional governments will promote the ordering of European defense equipment instead of American equipment, which will boost European defense stocks. They pointed out that the UKs commitment to increase its defense spending to 2.5% of GDP by 2027 is higher than they expected, which will especially benefit QinetiQ and Babcock International, which derive more than half of their revenue from the UK Ministry of Defense. The agencys first choice is German arms manufacturer Rheinmetall.On March 10, Heng Koon How, head of market strategy at UOB Global Economics and Market Research, said in a report that physical gold short squeeze is expected to push gold above $3,000 per ounce. "Uncertainty over trade tariffs has led to a sudden return of a large number of gold bars to the New York Mercantile Exchange and the United States, triggering a global gold short squeeze. In addition, the main positive drivers for gold remain unchanged, such as growing concerns about slowing economic growth." UOB recently raised its gold price forecast for the second quarter from $2,800 to $2,900 per ounce, the third quarter forecast from $2,900 to $3,000, and the fourth quarter forecast from $3,000 to $3,100.Germanys industrial output in January was -1.6% year-on-year after adjusting for working days, compared with -3.10% in the previous month.Germanys seasonally adjusted trade balance in January was 16 billion euros, compared with expectations of 20.6 billion euros and the previous value of 20.7 billion euros.

Gold Price Prediction: The XAU/USD pair stabilizes around $1,850 as the DXY flounders ahead of steady US inflation

Alina Haynes

Jun 08, 2022 14:56

 截屏2022-06-07 下午5.14.47.png

 

During the Asian session, the gold price (XAU/USD) is exhibiting choppy movement. The precious gold is fluctuating within a $2 range following a retreat from Tuesday's $1,855.64 high. This week's US inflation numbers will have a big influence on the Federal Reserve's (Fed) attitude to be taken the following week, hence causing considerable volatility in the foreign exchange market.

 

Fed chair Jerome Powell may implement an aggressive interest rate strategy in light of the optimistic US Nonfarm Payrolls report and annual inflation rate above 8 percent. Undoubtedly, rising pricing pressures are eroding household incomes in the United States, a situation that requires the Fed's sole attention. Fed Powell's declaration of a 50 basis point (bps) consecutive rate rise would be the ideal approach to continue the battle against inflation.

 

In the meantime, the US dollar index (DXY) is encountering obstacles at its important resistance level of 102.48. Tuesday's rise in positive market mood diminished the DXY's attractiveness and supported risk-perceived currencies. To go higher, the DXY must surpass Tuesday's high of 102.84.

Technical Analysis of Gold

XAU/USD is exhibiting an ascending triangle pattern on a four-hour time frame. The ascending trendline is drawn from the low of May 16 at $1,786.94, while the horizontal resistance is drawn from the high of May 24 at $1,866.89. At $1,850, the 21-period Exponential Moving Average (EMA) intersects with gold prices, indicating an impending consolidation. In the meanwhile, the Relative Strength Index (RSI) (14) oscillates between 40.00 and 60.00, indicating that forthcoming trading sessions will be volatile.

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