Trump's been a bit frustrated lately! Three major thorny issues have emerged one after another, and a major press conference is likely to trigger a safe-haven rally, with gold rebounding in response.
International spot gold continued its rebound on Friday (May 29), boosted by a surge in safe-haven demand during the day. It reached a high of $1735.20 per ounce in the US market. Market focus is on US President Trump's upcoming press conference, with investors concerned that further actions may exacerbate tensions between the US and China, thus providing sufficient buying support for gold.
Time:
2020-05-30 00:17
The latest economic data shows that US personal spending fell by 13.6% in April, the largest ever recorded monthly decline. Commentators have noted that while the market anticipated worse figures following the sharp drop in March, the actual data is still shocking, reflecting a simultaneous decline in both goods and services.
However, while personal spending saw a significant month-on-month decrease, income surged by 10.5%, the largest increase on record. This may reflect large-scale government transfer payments. If uncertainty is driving people to save more, it remains to be seen whether this will have a lasting impact on consumer spending.
The market remains focused on the latest developments in US-China relations. US President Trump is holding a press conference on China today, which is making investors nervous. Recently, Trump has been visibly angry, not only taking a strong stance against China but also lashing out on Twitter, while also facing the urgent issue of large-scale domestic protests.
On the other hand, large-scale protests in the US are escalating, which is also limiting market risk appetite to some extent. Recently, the death of a Black man at the hands of a white police officer in the US has sparked widespread protests. In response, President Trump has taken a strong stance and deployed the National Guard to control the situation.
Technically, the 1-hour chart shows that spot gold has not yet clearly broken out of its previous downward channel. However, the longer-term upward trend line for gold prices remains valid, and the price has returned above last week's low. From a speculative perspective, there is still a bullish bias around the $1705 per ounce support level, with potential upside to test the first and second resistance levels at $1736 and $1754 per ounce, implying an upside potential of over $30 from current levels.
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Although gold prices rose this week, market volatility has clearly increased. While the US-UK agreement is symbolic, its content is limited and insufficient to alleviate concerns about a global economic slowdown. Therefore, gold prices will continue to fluctuate between safe havens and policy signals, closely monitoring the Federal Reserve's interest rate expectations and global trade sentiment.