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Weekly Summary (6/6/2022)



Non-farm data show inflation remains severe  

On Friday evening, non-farm payrolls data was released to increase by 390,000, lower than the previous period but higher than expected, and the unemployment rate was comparable to the previous period at 3.6%. After the release of the data caused a short term drop in gold prices. The data also showed that the U.S. economic inflation situation has not been effectively eased which continue to support the Fed's hawkish policy.

Last week, gold prices from the low to the high position, the lowest price 1820 range to highest 1873 position, after the impact of non-farm payrolls data, prices fell back over the weekend, the end of the day to 1850 prices closed showing a downward trend.

Fed governors and vice chairmen have stated one after another, in order to effectively control the upward pressure on prices, the Fed will continue to steadfastly pursue the policy of raising interest rates. In addition, given the overheating of the U.S. economy caused by inflation, it is the cost of living for Americans that has increased, directly causing a significant drop in support for the Biden administration and illustrating the need for the inflationary situation to be suppressed. It is foreseeable that the Fed will continue to raise interest rates by 50 basis points or more in future rate meetings.

Given that the inflation situation remains serious, the Fed and the US government will continue to use interest rates as leverage to suppress inflation, and the dollar index may rise further which in turn will put gold under pressure. This week's main tone may be under pressure to the downside, the price may be further down to the 1800 integer range.

Basic strategy for the week.

Consider sell side in low position and the main target 1820-1800 range. Monday need to pay attention to jump low.

Technical analysis.

Last week, the early price always showed an upward trend which up to 1873 position. Affected by non-farm data, prices began to fall on Friday. The price also pierced downward on Friday Bollinger first mid-track line into the downtrend. After the price fell continuously, successively pierced the lower line of the Bollinger band, downward trend momentum is more obvious.

Important information for this week.

Friday: 20:30 U.S. May CPI annual rate not quarterly adjusted (%)


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