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Weekly Summary (31/5/2022)

Prices going to rise and market waiting for non-farm payrolls data

Spot gold showed a small upward oscillation trend so far last week with the price bottom at 1840 and the highest at 1865. Late last week to this Monday the price began to extend upward, changing the previous situation of falling and hovering at low levels. Currently the price is in the 1850 range in a downward oscillating trend.

The market opened this Monday with a clear upward price trend, mainly because of the lower dollar index and the attenuation of economic data. Data released on Friday (May 27) showed that U.S. consumer spending rose more than expected in April as households increased their purchases of goods and services and inflation growth slowed. This could support second-quarter growth amid heightened recession fears, and the Federal Reserve may take a more cautious pace of water collection, which in turn weakens the dollar.

The U.S. PCE price index released last week was generally weaker in April, with the core PCE price index, an inflation indicator of concern to the Fed, recording an annual rate of 4.9%, compared to the previous value of 5.2%. Also U.S. personal income grew less than expected, but real personal spending improved.

The U.S. non-farm payrolls are expected to increase by 350,000 in May which compared with the previous value of an increase of 428,000. This indicates that the number of new U.S. non-farm payrolls is expected to fall by more than 27%. The decline in new jobs could weaken the hawkish stance in the Fed's monetary policy in June, which will eventually boost gold prices.

This week's strategy: mainly in buying side on gold

This week's focus on Friday night's non-farm payrolls data which is expected to produce a larger decline, will likely further stimulate gold prices to run upward. Since Monday, the price is stimulated upward by the dollar index and the overall economic form, this week will have been a continuation of the trend. Upward price consideration 1870-80 range.

Technical analysis.

Last week the price made a V-shaped reversal, with the price reversing from the trough of 1840 to the upside. After the opening of this Monday, the price continued to rise up to the 1863 position. A slight reversal followed and is currently at the 1854 position.

From the mean crossover, although the five-day mean has been above, guiding the upward range, but it can be seen that the upward momentum is not very strong, to the opening of this Monday, the mean turned upward sharply.

Important information for this week.

Wednesday: 20:15 U.S. May ADP employment (million)

Thursday: 22:00 U.S. April factory orders monthly rate (%)

Friday: 20:30 U.S. May non-farm payrolls change QoQ (million)


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