Gold rose 1280 to brush a six-week high this week, the gold market will welcome two super "burst points"
International spot gold broke through $1,280 at the beginning of the Asian session on Monday (June 5) and hit a six-week high of $1282.16 per ounce. Last Friday (June 2), disappointing data on US employment and wage growth may disrupt the Fed’s interest rate hike in the second half of the year. The dollar fell to a seven-month low against a basket of currencies, while the price of gold fell. The surge was boosted by more than 1%, and the intraday high touched $1,279.60 per ounce, the fourth consecutive week of gains. This week, the market will usher in heavy events such as the UK general election and the testimony of the Komi Congress, which is expected to trigger a large-scale fluctuation in the gold market. According to the latest survey, traders are mostly optimistic about the performance of gold prices this week.
US Labor Department data on Friday (June 2) showed that the number of non-farm payrolls increased by 138,000 in May, and the market expects an increase of 182,000. The US unemployment rate in May was 4.3%, expected to be 4.4%; The monthly average hourly wage rate rose by 2.5%, expected to increase by 2.6%, and the previous value rose by 2.5%.
(US non-agricultural employment population chart)
After the data was released, the US dollar index fell sharply by nearly 30 points in a short period, hitting a low of 96.84, hitting a new low since November last year; US stocks hit a record high for the second consecutive day; spot gold soared more than $10, refreshing $1,279.10 per ounce on April 25 Since the high position.
(Gold 30 minutes)
Among other precious metals, spot silver rose 1.7% to $17.54 per ounce last Friday, after hitting a one-month high; spot platinum rose 2.4% to $949.60 per ounce; spot palladium rose 2% to $839.75 per ounce, earlier It hit a maximum of $843.10 since September 2014.
However, the market now believes that employment data is still enough to support the Fed to raise interest rates in June. According to CME's FedWatch, interest rate futures showed that traders expect the Fed to raise interest rates by 96% on June 14.
David Lamb, head of trading at FEXCO Corporate Payments, said the momentum and expectations for a rate hike in June were strong enough to ensure that Fed Chairman Yellen would still act on June 14 as expected.
Patrick Harker, president of the Federal Reserve Bank of Philadelphia, also pointed out that the fear of “not perfect†inflation data in recent months is “unfounded†and insists that it raises interest rates three times a year, 25 basis points each time. The view remains unchanged due to the strong economic situation.
At the same time, Dallas Fed President Kaplan insisted on raising interest rates twice during the year, while Federal Reserve Governor Jerome Powell also called for a gradual rate hike.
Goldman Sachs economist Jan Hatzius said in a research report last Friday that the Fed is expected to conduct the third time this year in December, given that the non-farm payrolls report in May shows a drop in unemployment and a slowdown in job growth. Raise interest rates and announce the normalization of the balance sheet in September. The bank had expected to raise interest rates again in September and announced its balance sheet plan in December.
Michael Feroli, chief US economist at JP Morgan, said job growth was a bit disappointing, but it was enough to show that the job market continued to be tight. This does not change the overall state of the economy, that is, economic growth exceeds historical trends. This makes the Fed's interest rate hike in June still on the expected track.
Tai Wong, head of commodities trading at BMO Capital Markets, said, “The non-agricultural report is generally weak, which gives a short-term boost to the price of gold. However, although the Fed will raise interest rates in June, the next rate hike may be a 'struggle’ '."
Bill Baruch, senior market strategist at iiTrader, said that the "doves" rate hike may be held at the meeting, as the US economic data does not seem to support the rate hike three times this year. He pointed out that the Fed needs to release a cautious tone that gold will rise above $1,300 per ounce. Prior to this, he expected gold to test resistance at $1,290 per ounce.
British election + Komi testimony this week, the gold market is now turbulent
The Trump "Leak Door" and "TongRumen" scandals, which have been quiet for nearly a week, seem to be expected to regain the headlines of the world's authoritative media. According to foreign media reports, former US Federal Bureau of Investigation (FBI) director James Comey has confirmed that he will go to the Senate Intelligence Committee to testify on Thursday (June 8). Provide clues to its interaction with President Trump over the past few months.
The Senate Intelligence Committee’s statement stated that Komi will begin public testimony at 10 am on Thursday, and will have a closed-door discussion with the committee that afternoon. According to foreign media reports, Komi wrote in a memo that President Trump asked him to stop investigations against former national security adviser Michael Flynn suspected of collaborating with the Russian government.
The well-known gold information website Kitco wrote on Thursday that investors are waiting for Komi's testimony, which is expected to be a risk factor affecting the dollar's movement. The renewed political turmoil may have a positive impact on gold prices next week, but due to the Federal Reserve's June. The monetary policy meeting is approaching, and the price increase of gold should be limited.
George Gero, managing director of RBC Wealth Management, said he expects gold prices to rise this week due to Komi’s testimony. However, he added, as the Federal Reserve's (FED) June monetary policy meeting gradually focused on the market, the price of gold should be limited.
The US political scene continues to be turbulent, which supports the recent gold price. On May 17, the price of gold rose 1.8%, the biggest single-day performance in two months, mainly due to a report on Komi.
Gero said he expects gold prices to remain stable in the near term, and the Fed rate hike may limit the upside of gold prices, but geopolitical uncertainty will provide strong support.
In addition, this Thursday (June 8th) the United Kingdom will usher in parliamentary elections. The gap between the ruling party and the opposition party has narrowed unexpectedly. Although the party where Prime Minister Maya is located is expected to maintain a majority, some polls show that the absolute advantage of the Conservative Party is slowly declining. Another attack after the Manchester bombings may once again shake the political situation. If there is any accident in the general election, the market risk sentiment will be suppressed, and the golden light will shine.
According to the BBC, after 10 pm local time on Saturday (June 3), three serious security incidents occurred in London police, which occurred in London Bridge, Borrow Market and Vauxhall District, killing six people, 20 The person was injured.
British Prime Minister Theresa May raised her anti-terrorist tune after a terrorist attack in London on Saturday night. She said that extremism has been tolerated for too long and said it would seek new forces to eradicate terrorism.
Some analysts pointed out that if Teresa May can't win the general election on June 8 by absolute advantage, it will not be good for her, because the formal negotiations for Brexit will begin. If she loses majority support in the parliament, it will make the British political situation. Into chaos.
Most polls show that the Conservative Party's leading edge has narrowed, and one of the survey results even showed that the lead is only 3 percentage points. According to the latest Ipsos MORI weekend survey, the British Prime Minister Teresa May’s polls dropped to 5 percentage points, up from 15 percentage points two weeks ago.
In addition, the European Central Bank will also hold a monetary policy meeting this week. It is expected that the official wording of the European Central Bank will have some fine-tuning, but the policy will remain unchanged. ECB officials may acknowledge that the euro zone's growth prospects are more balanced, giving up on the “downside†risk in the statement. Analysts pointed out that anything that benefits the euro will benefit gold, as it will lead to a weaker dollar.
According to a recent survey released by Bloomberg on Friday (June 2), the number of longs has gained the upper hand this week, with traders and analysts watching the next week's gold price trend for the second week in a row. Of the 14 gold traders and analysts surveyed, 11 were bullish (79%), 2 were bearish (14%), and 1 was flat (7%).
Looking ahead, analysts are optimistic that gold will continue to rise as the dollar weakens and bond yields fall. After the non-agricultural announcement, the 10-year US bond yield fell to a minimum of 2.15% this year.
Ole Hansen, head of commodity strategy at Saxo Bank, points out that he is focusing on $1,280 per ounce, as breaking this level will give gold enough momentum to push it to $1,300 per ounce.
FXTM Forex analyst Lukman Otunuga also believes that bond yield declines and a weaker dollar are good for gold, he added, and he expects prices to rise to $1,300 per ounce.
“Gold is preparing to rise to $1,300, as the weak dollar has provided a solid foundation for the bulls to re-launch a round of buying. In view of the disappointing May employment report, the Fed’s expectation of a rate hike after June is hit, gold Well supported," he said.
(Editor: Fang Fengjiao HF055)
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