Technically, there is a need for correction in the international gold price, and a short-term rebound to $1803 is possible.
On June 18, international gold prices rebounded slightly, but after two consecutive days of heavy losses. The hawkish signals released by the Federal Reserve regarding potential monetary policy adjustments supported the dollar and bonds, weakening gold's appeal as an inflation hedge. Technically, there is a need for price correction, and gold prices may rebound to $1803 in the short term.
Time:
2021-06-18 14:52
Huitong News Network— On June 18, international gold prices rebounded slightly, but after two consecutive days of heavy losses, the hawkish information released by the Federal Reserve on potential monetary policy adjustments supported the dollar and bonds, weakening gold's appeal as an inflation hedge. Technically, there is a need for price repair, and gold prices may rebound to $1803 in the short term.
At 2:02 PM Beijing time, Spot gold rose 0.57% to $1783.67 per ounce; the main COMEX gold futures contract rose 0.51% to $1783.7 per ounce; The US dollar index rose 0.05% to 91.956.
Gold prices have fallen nearly 5% this week, or the worst weekly performance since March 2020; the US dollar index has risen more than 1.6% this week, and is expected to record the largest weekly positive line since September 2020; the 10-year US Treasury yield is stable above 1.50%, increasing the opportunity cost of holding non-interest-bearing gold.
Federal Reserve officials have begun to release messages about exiting the super-loose monetary policy. So far, the exit has been relatively smooth, but they also hinted that this tightening will be faster than the last crisis.
Higher interest rates will weaken the appeal of gold, as the opportunity cost of holding gold will be higher. The world's largest gold exchange-traded fund (ETF)—SPDR Gold Trust—saw its gold holdings fall 0.4% on Thursday to 1041.99 tons, reflecting market sentiment.
Data released on Thursday (June 18) confirmed that a sharp surge in energy prices and more expensive services pushed up Euro zone consumer inflation in May, as expected, pushing price increases slightly above European Central Bank 's target.
From a weekly perspective, spot gold is in a downward ((y)) wave starting from $1917, and has now reached the 38.2% target of $1764. The support below is looking at the 61.8% target of $1670. The ((y)) wave is a sub-wave of the adjustment wave 4 starting from $2075.
From a daily perspective, gold prices are expected to start a rebound (iv) wave from $1766, with a rebound target of $1803, which is the 161.8% target of the downward (iii) wave starting from $1903. (iii) wave and (iv) wave are both sub-waves of ((y)) wave.
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