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The yield on Japans 40-year government bonds fell 2.0 basis points to 3.785%.On July 1st, European Central Bank (ECB) Governing Council member Demarco stated that the ECB should not rush into further interest rate hikes given the unexpectedly rapid decline in oil prices. The ECB raised rates in June, with its own forecasts based on further policy tightening. However, the rapid decline in energy costs in the following weeks strengthened the case for delaying further rate hikes. Demarco stated that lower energy costs should quickly alleviate inflation expectations and curb wage increases. This statement further strengthens the ECBs rationale for keeping rates unchanged this month, after several policymakers had previously called for patience and a pause in further action. Demarco stated that there is only reason to raise rates now if a second round of inflationary effects occurs, inflation expectations decouple, or wage increases become more prevalent. "We havent seen these scenarios yet, so given that oil prices have fallen back to levels similar to those before the conflict, we can wait for the next round of forecasts rather than hastily raising rates again and risking unnecessary damage to economic growth." He also noted that even in the more dovish scenario in the latest forecast, there is still an assumption of further policy tightening. Therefore, if future data confirms this scenario, the European Central Bank may still need to raise interest rates further.The yield on Japans 5-year government bonds rose 2.5 basis points to 1.915%.The yield on Japans two-year government bonds rose 2.0 basis points to 1.395%.ECB Governing Council member Demarco: It is worth noting that even in the more dovish scenario in the latest forecast, there is still an assumption of further policy tightening. Therefore, if future data confirms this scenario, the ECB may still need to raise interest rates further.

Predictions for Gold Prices — Gold prices rose as the dollar weakened

Alina Haynes

May 24, 2022 09:43

Gold prices rise as the dollar weakens to start the week. The currency experienced negative pressure on reduced growth prospects and likely march toward recession. Benchmark rates climbed as shares surged today. Today, the yield on the ten-year Treasury note rose by 3 basis points.

 

On Monday, there was little going on in the world of business. Focus continues on Fed Chair Powell’s speech tomorrow and major economic statistics including PCI and first-quarter GDP published this week. Investors are anxious about impending recession and sluggish economic growth.

Analytical Methods

Gold prices came back from session highs but are still higher and possibly be headed to the 1860s. This week's economic statistics might point to a slowdown in economic growth, which would benefit gold.

 

To begin the week, gold prices held above the 200-day moving average of $1839. Support is indicated near the 200-day moving average near 1839. Resistance is apparent at the May 12th peak of 1858.

 

The Fast Stochastic has formed a crossover buy signal, indicating that the short-term momentum is bullish. Prices are no longer oversold as the fast stochastic prints a value of 54.58, considerably above the oversold trigger level of 20.

 

Medium-term momentum turns bullish as the MACD can provide a crossover buy signal. This occurs as the 12-day moving average minus the 26-day moving average passes below the 9-day moving average of the MACD line.

 

Price declines are predicted by the MACD (moving average convergence divergence) histogram, which shows a downward trend in price.

 

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