In early Asian trading on Thursday (June 2), spot gold fell slightly at the opening, from 1848.8 to 1843.9, a drop of about 5 US dollars, and is now reported at 1844.2 US dollars per ounce. Looking back on yesterday’s market, the price of gold fluctuated and fell in the Asian session on Wednesday, falling to 1828.3 for first-line stabilization; then it rose in shock during the European and American session, recovering the intra-day decline, refreshed the daily high to 1849.7, and finally closed at 1846.2 US dollars per ounce, closing on the daily line.

In terms of geopolitics, the EU has imposed a new round of sanctions on Russia. On the basis of embargoing Russian oil, insurance companies will also be restricted from underwriting Russian crude oil products. Because of this, the market is worried that rising fuel prices will lead to rising inflation, and safe-haven funds have flowed into gold.

According to the economic Beige Book released by the Federal Reserve, the economy of the 12 regions under its control has slowed down, which means that the interest rate policy has not yet seen the effect of curbing inflation, but its damage to the economy has already appeared. Therefore, last week, Fed official Bostic said that interest rate hikes should be suspended in September, but this week, many Fed officials refuted the suspension of interest rate hikes in September. to 3.5% to suppress inflation. Benefiting from the beautiful economic data in the United States and the hawkish remarks of the Federal Reserve officials, the US dollar and US bond yields have been boosted, which will limit gold’s gains to a certain extent.

A number of economic data will be released in the next day, including the US ADP data for May, the number of jobless claims for the week, etc. The data has the opportunity to guide the market direction, and it is necessary to pay attention.

Technically, spot gold relies on the middle rail of Bollinger Bands on the daily chart, and the KD indicator is glued. On the 4-hour chart, the market has tested the 1850 first-line resistance many times since yesterday’s US session, but none of them has effectively broken through, which proves that the resistance here is effective, and the KD indicator is at a high level. In the 1-hour cycle, pay attention to the 1840 support below. If it breaks down effectively, the gold price will still test yesterday’s low of 1828. In general, it is recommended to rely on the resistance position and go short on rallies.

Resistance position: 1850/1854/1865

Support position: 1840/1835/1828

Trading Advice:

Entry around 1848-1850, stop loss at 1855, target the profit taking at 1840/1835/1830.

Analyzed by: Mr. Chris Lau, Independent Analyst