Expectations of the Federal Reserve's monetary policy:
According to the latest data from CME's "Fed Watch", the market's expectations for the Federal Reserve's monetary policy shift are undergoing subtle changes. The probability of maintaining interest rates unchanged at the May interest rate meeting is as high as 91.7%, while the probability of a cumulative interest rate cut of 25 basis points is 61.8%. This shows that the market generally expects the Federal Reserve to maintain policy stability and may start a rate cut cycle as early as June. This change in expectations has weakened the attractiveness of gold as an inflation hedge tool, as the postponement of interest rate cut expectations has reduced market concerns about inflation risks.
Geopolitical and trade situation:
Former President Trump recently stated that he would abandon his threat to fire Federal Reserve Chairman Powell, a move that significantly reduced the risk of politicization of US monetary policy. At the same time, his optimistic statement on Sino-US trade negotiations further weakened the market's risk aversion demand. The reduction in political uncertainty and the easing of trade tensions have doubled the risk of gold's safe-haven appeal, leading to capital outflows from the gold market.
Daily level:
Gold showed a typical high-rise and fall trend yesterday, with the daily line closing with a negative column with a long upper shadow, which is usually regarded as an important signal of a staged peak. The upper shadow shows that bulls encountered strong selling pressure when trying to push up prices, and finally bears dominated. The $3,500/ounce area constitutes an obvious resistance level, and the suppression effect of this position is confirmed.
Hourly level:
The short-term trend shows the market's turning point more clearly. Gold prices fluctuated lower after being under pressure in the 3,500 area. The $50 low-opening gap that appeared this morning is particularly rare. This gap often indicates an accelerated change in trend. Although there was a technical rebound in the early trading, it failed to form a sustained buying order. Instead, it encountered resistance again in the 3342/3343 area, confirming the short-term bear-dominated market pattern.
Key price:
Resistance: 3342/3343 area (short-term), 3335/3338 area (ideal entry position for rebound short orders)
Support: 3290/3285 area. The gains and losses of this support range will determine the further opening of the downward space
III. Operation strategy suggestions
Trend judgment:
The current gold market has formed a stage top, and the technical form shows that the trend has turned from long to short. The short-term market shows obvious short-term arrangement characteristics, and it is expected that the downward trend will continue during the European trading session.
Trading suggestions:
Short order strategy: It is recommended to arrange short orders in the 3335/3338 area, with a stop loss set above 3350 and a target of 3290/3285 area
Position management: In view of the abnormal volatility in the early trading, it is recommended to adopt a light position trial strategy and gradually increase positions after the trend is confirmed
Risk warning: Pay attention to the performance of the 3290/3285 support area. If it breaks down effectively, it may trigger an accelerated decline, otherwise it may usher in a technical rebound
IV. Market sentiment and capital flow
Market sentiment has clearly turned to caution. The sharp low opening in the early trading has led to the outflow of some long stop-loss orders, exacerbating price fluctuations. From the perspective of capital flow, the changes in the open interest of COMEX gold futures show that some longs are withdrawing from the market. At the same time, the holdings of gold ETFs have been stable in recent days, with no obvious signs of increasing positions, reflecting that institutional investors are taking a wait-and-see attitude towards the current price.
V. Outlook for the future market
In the medium term, the trend of gold will depend on two key factors: one is the specific time when the Federal Reserve's monetary policy turns, and the other is the development of the global geopolitical situation. Before the June interest rate meeting, if the US economic data continues to be strong, the expectation of interest rate cuts may be further postponed, which will put continuous pressure on gold prices. In the short term, the technical short position has an obvious advantage, and the operation should be mainly short-selling on rebounds. Pay close attention to the performance of the 3290/3285 support area. Whether this position is broken or not will determine the further opening of the downside space.
According to the latest data from CME's "Fed Watch", the market's expectations for the Federal Reserve's monetary policy shift are undergoing subtle changes. The probability of maintaining interest rates unchanged at the May interest rate meeting is as high as 91.7%, while the probability of a cumulative interest rate cut of 25 basis points is 61.8%. This shows that the market generally expects the Federal Reserve to maintain policy stability and may start a rate cut cycle as early as June. This change in expectations has weakened the attractiveness of gold as an inflation hedge tool, as the postponement of interest rate cut expectations has reduced market concerns about inflation risks.
Geopolitical and trade situation:
Former President Trump recently stated that he would abandon his threat to fire Federal Reserve Chairman Powell, a move that significantly reduced the risk of politicization of US monetary policy. At the same time, his optimistic statement on Sino-US trade negotiations further weakened the market's risk aversion demand. The reduction in political uncertainty and the easing of trade tensions have doubled the risk of gold's safe-haven appeal, leading to capital outflows from the gold market.
Daily level:
Gold showed a typical high-rise and fall trend yesterday, with the daily line closing with a negative column with a long upper shadow, which is usually regarded as an important signal of a staged peak. The upper shadow shows that bulls encountered strong selling pressure when trying to push up prices, and finally bears dominated. The $3,500/ounce area constitutes an obvious resistance level, and the suppression effect of this position is confirmed.
Hourly level:
The short-term trend shows the market's turning point more clearly. Gold prices fluctuated lower after being under pressure in the 3,500 area. The $50 low-opening gap that appeared this morning is particularly rare. This gap often indicates an accelerated change in trend. Although there was a technical rebound in the early trading, it failed to form a sustained buying order. Instead, it encountered resistance again in the 3342/3343 area, confirming the short-term bear-dominated market pattern.
Key price:
Resistance: 3342/3343 area (short-term), 3335/3338 area (ideal entry position for rebound short orders)
Support: 3290/3285 area. The gains and losses of this support range will determine the further opening of the downward space
III. Operation strategy suggestions
Trend judgment:
The current gold market has formed a stage top, and the technical form shows that the trend has turned from long to short. The short-term market shows obvious short-term arrangement characteristics, and it is expected that the downward trend will continue during the European trading session.
Trading suggestions:
Short order strategy: It is recommended to arrange short orders in the 3335/3338 area, with a stop loss set above 3350 and a target of 3290/3285 area
Position management: In view of the abnormal volatility in the early trading, it is recommended to adopt a light position trial strategy and gradually increase positions after the trend is confirmed
Risk warning: Pay attention to the performance of the 3290/3285 support area. If it breaks down effectively, it may trigger an accelerated decline, otherwise it may usher in a technical rebound
IV. Market sentiment and capital flow
Market sentiment has clearly turned to caution. The sharp low opening in the early trading has led to the outflow of some long stop-loss orders, exacerbating price fluctuations. From the perspective of capital flow, the changes in the open interest of COMEX gold futures show that some longs are withdrawing from the market. At the same time, the holdings of gold ETFs have been stable in recent days, with no obvious signs of increasing positions, reflecting that institutional investors are taking a wait-and-see attitude towards the current price.
V. Outlook for the future market
In the medium term, the trend of gold will depend on two key factors: one is the specific time when the Federal Reserve's monetary policy turns, and the other is the development of the global geopolitical situation. Before the June interest rate meeting, if the US economic data continues to be strong, the expectation of interest rate cuts may be further postponed, which will put continuous pressure on gold prices. In the short term, the technical short position has an obvious advantage, and the operation should be mainly short-selling on rebounds. Pay close attention to the performance of the 3290/3285 support area. Whether this position is broken or not will determine the further opening of the downside space.
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.
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.