Gold, today focus on 1975 position
Recently, the fluctuation in the price of gold has not been too significant. The previous decline was primarily influenced by expectations of a US debt default. The price of gold has been sliding from its peak of $2080 per ounce to $1930 per ounce, a decrease of $150.
In the face of a very "difficult" choice and negotiations, the United States has chosen to raise the debt ceiling. To avoid disappointing the "creditors," they have decided to print more money. Central banks holding US bonds are not happy about this.
While money is being spent, inflation is "burning" and becoming more intense. The US had expected the CPI to drop to 2%, but the seasonally adjusted core CPI for the end of May, announced last Tuesday, was 5.3% on an annual basis. There is still some distance from the target, and high inflation will likely force the federal government to maintain high interest rates. Tightening monetary policy by increasing interest rates may cause the US economy to suffer, especially the three major stock indices, resulting in a decline in the market capitalization of overvalued companies. On the other hand, lowering interest rates would undoubtedly be like adding fuel to the fire of inflation. Federal Reserve officials are engaged in a game of finding a way out. It is not a choice between two extremes but a balancing act of weighing the pros and cons before making a decision.
Finally, the midterm elections in the United States will also affect the speed of economic recession. It involves a competition of interests between the Democratic and Republican parties. Economic recession is an inevitable trend, but the future will only get better. Any economic recession should not be excessively pessimistic. It is unquestionable that the world will develop towards a better direction. This is a belief held by Warren Buffett, who advises against using economic cycles to judge the future and instead suggests maintaining an optimistic attitude.
As for gold, this is a logical interpretation of the overall direction. The importance of the 1985 level has been mentioned last week. If it is broken, it signifies the end of the short-term downtrend in gold. If there is no breakthrough above 1985, the upward movement can be seen as a rebound. Therefore, short positions can be entered after a pullback, with a defensive stop-loss set above 1985. The ideal position is above 1970, as setting the stop-loss too low would not be favorable, and there is no need to chase after roller coaster market trends. This is a biased trade towards the left side.
Gold focus: 1980-1975 resistance area. 1950-45 support area.
In the face of a very "difficult" choice and negotiations, the United States has chosen to raise the debt ceiling. To avoid disappointing the "creditors," they have decided to print more money. Central banks holding US bonds are not happy about this.
While money is being spent, inflation is "burning" and becoming more intense. The US had expected the CPI to drop to 2%, but the seasonally adjusted core CPI for the end of May, announced last Tuesday, was 5.3% on an annual basis. There is still some distance from the target, and high inflation will likely force the federal government to maintain high interest rates. Tightening monetary policy by increasing interest rates may cause the US economy to suffer, especially the three major stock indices, resulting in a decline in the market capitalization of overvalued companies. On the other hand, lowering interest rates would undoubtedly be like adding fuel to the fire of inflation. Federal Reserve officials are engaged in a game of finding a way out. It is not a choice between two extremes but a balancing act of weighing the pros and cons before making a decision.
Finally, the midterm elections in the United States will also affect the speed of economic recession. It involves a competition of interests between the Democratic and Republican parties. Economic recession is an inevitable trend, but the future will only get better. Any economic recession should not be excessively pessimistic. It is unquestionable that the world will develop towards a better direction. This is a belief held by Warren Buffett, who advises against using economic cycles to judge the future and instead suggests maintaining an optimistic attitude.
As for gold, this is a logical interpretation of the overall direction. The importance of the 1985 level has been mentioned last week. If it is broken, it signifies the end of the short-term downtrend in gold. If there is no breakthrough above 1985, the upward movement can be seen as a rebound. Therefore, short positions can be entered after a pullback, with a defensive stop-loss set above 1985. The ideal position is above 1970, as setting the stop-loss too low would not be favorable, and there is no need to chase after roller coaster market trends. This is a biased trade towards the left side.
Gold focus: 1980-1975 resistance area. 1950-45 support area.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.