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Weekly Summary (23/5/2022)

The new virus may stimulate gold prices and impact of the situation in Russia and Ukraine has been limited

Spot gold was first depressed and then raised last week, the price rose from low position 1810 to 1850 After opening on Monday, the price showed an upward trend and the current price at 1853. It is still in the upward climbing trend.

The rise in gold prices since last week mainly benefited from the fluctuation of the US dollar and the expectation of US dollar interest rate hike. The gold price will probably continue to be supported in this week. This week, the fundamental focus is mainly on the newly emerging monkeypox virus. At present, cases of monkeypox virus have been reported in 12 countries and regions around the world. The pointed out that the existing information shows that interpersonal transmission is taking place among people in close physical contact with symptomatic cases. In general, human to human transmission of monkeypox virus is not common. Interpersonal transmission routes include close contact with respiratory secretions, skin damaged parts or contaminated items of infected persons. It usually takes a longer time to spread respiratory droplets face to face. In addition, monkeypox virus can also be transmitted from mother to child and sexually.

At present, the spread of monkeypox virus is not as violent and rapid as that of novel coronavirus, but we should observe the relevant reports this week. If the situation is serious or the spread trend is very obvious it may further stimulate the rise of gold prices in the short term.

In terms of the Russian Ukrainian war, the Russian army has basically gained control of the Asian speed steel plant and the internal Ukrainian army has basically surrendered, which is also the first phased victory of the Russian army since entering Ukraine. But overall, the situation in front of both sides is not optimistic and both sides will continue to face greater pressure. Russian and Ukrainian leaders have also made concessions and said that the channel of negotiation has not been closed. At present, the impact of the Russian Ukrainian war on gold prices is very limited.

In addition, the economic slowdown caused by the US dollar interest rate hike will hit the expectations in the future and then affect the gold price in the middle line range, but the impact is relatively limited in the weekly calculation range. Unless the Fed makes stimulating remarks this week.

This week's strategy:

This week's fundamental information has the trend of boosting gold from the perspective of risk aversion and dollar attribute. Generally speaking, the price will mainly rise this week, but it needs to be cautious to buy at the current position of 1850 + and beware of price correction. This week, you can consider the upward target 1900 position.

Technical analysis:

Last week, the price entered the depression, the lowest position entered the 1800 range and then rebounded and jumped to a new high. It opened at 1846 on Monday. At present, it has exceeded 1850 and is still in an upward trend. From the 5-day / 10 day moving average, the overall upward momentum last week was strong and more, and the 5-day moving average of the red line was obviously in a strong trend. After the opening on Monday, there was another cross, and the red line went online. There is a high probability of maintaining a strong rise today.

Important information of this week:

Wednesday: 20:30 initial monthly rate of durable goods orders in the United States in April (%)

Thursday: 20:30 revised value of annualized quarterly rate of real GDP in the first quarter of the United States (%)

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