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Weekly Summary (18/4/2022)

The situation in Russia and Ukraine becoming hot and stimulating the risk aversion attribute

As expected last time, the gold price fluctuated upward last week and entered the high range of this month. There are two main reasons: the US inflation reached a new high of 8% and was reaching the highest level in 40 years. The war between Russia and Ukraine intensified. This week, the Russian missile cruiser "Moscow" was sunk and the two sides entered a decisive battle situation in all aspects of sea, land, and air further stimulating the safe haven attribute of gold and driving the gold price higher. On Friday the market closed one day in advance and the final price is at 1972.

The Fed started a new round of interest rate hike cycles in March. In view of the uncertainty caused by Russia's invasion of Ukraine, the Fed's interest rate hike attitude in March was conservative, only 25 basis points. But now it seems that the Fed needs to take more urgent action to curb inflation as the economy continues to be strong.

Russian President Vladimir Putin said on Tuesday that the peace talks have entered a dead-end, suggesting that there is no possibility of negotiation between the two sides. The United States has also described Russia's war behavior as genocide and war crimes and will then provide $800 million in military assistance. At present, Russian troops have withdrawn from Kiev and regrouped in northern Ukraine and brewing a new offensive against Sparton. The situation of the two sides has gradually entered the interval of a decisive battle.

Under the influence of US inflation and the heat of the war between Russia and Ukraine, the risk aversion properties of gold, silver, and crude oil will be further stimulated. It is expected that the price of gold will rise further this week. At present, it is mainly focused on the new high in 1980. Beyond 1980, the market may move towards the 2000 integer figure.

Technical analysis:

Last week, due to the holiday the market was opening on Thursday, the early price moved in the middle and upper rail side of the brin line, showing an upward trend, reaching the highest position of 1981. The price in the second half began to the callback, breaking through the middle rail line and moving downward, but the upward driving force of the market still exists. The lowest entered the 1960 range and closed at 1972 in late trading which still showed an upward trend.

Important information for this week:

Thursday: 02:00 the Federal Reserve releases the beige book on economic conditions.

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