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Weekly Summary (9/5/2022)

April non-farm employment data was higher than forecast and interest rates were raised to curb the gold.

The price of spot gold broke through 1900 last week and was reaching its highest position since 1910. With the Federal Reserve raising interest rates by 50 basis points and the impact of no-farm employment data in April, the price turned downward after reaching the high point with the lowest position of 1850 In view of the Fed's continuous hawkish performance, the Fed's interest rate hike against the US dollar has not been completed this year and spot gold is still bearish in the future.

Last week, the Federal Reserve announced that it would raise the federal funds rate range by 0.5 percentage points to 0.75% - 1.00%, the largest rate increase in nearly 22 years. However, at the press conference, US Federal Reserve Chairman Powell clearly ruled out the possibility of raising interest rates by 75 basis points at the upcoming monetary policy meeting, which limited the decline of gold prices. However, Powell also made it clear that the interest rate hike already considered by the Federal Reserve "will not be pleasant" because it will force Americans to pay more for home mortgages and car loans, and may reduce the value of assets. He and his colleagues are determined to restore price stability even if it means that the measures taken will lead to a decline in business investment and household spending, as well as a slowdown in economic growth.

The United States added 428000 non-farm workers in April, an increase of 380000 higher than expected, the smallest increase since September 2021, but the previous value was revised down to 370000; The unemployment rate was 3.60% before it was flat, 0.1 percentage points higher than the expected value; The average annual hourly rate is 5.50% in line with the expected value, which is 0.1 percentage point lower than the previous value.

This week, spot gold has no obvious momentum to push upward. From the perspective of fundamentals, it is mainly bearish and the price is in line with the 1850 position.

Trading strategy for this week:

This week's basic trading style mainly considers short selling. On Monday, we should pay attention to the downward market such as short jumps and low openings that may suddenly appear. Because of the lack of obvious upward momentum, you can consider making a profit and leaving the market before you pay. Bearish prices mainly point to 1850 If there is an upward market, you can consider entering the market to buy after breaking through 1900.

Technical analysis:

Last week, the price was mainly affected by the market environment and including the Fed's interest rate hike and non-farm data which all suppressed the gold price to a certain extent. On the Ichimoku chart, the price broke through the clouds in the early stage and turned back downward. In the later closing stage, it has been in the clouds without obvious trend and closed at 1881.56 at the end of the week. Showing a downward trend.

Important data of this week:

Wednesday: 20:30 US April CPI annual rate (%)

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