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Weekly Summary (28/6/2022)

G7 limits imports of Russian gold, and economic pessimism in the second half of the year

Gold prices rose after the opening of the trading session on Monda with a high position to 1840. The market started to fall on Tuesday and is currently at 1823, showing mainly a downward trend. Spot gold rose on Monday as some G7 countries began to ban gold imports from Russia. In addition, gold prices were also supported by a difficult move in the dollar index as traders reassessed the prospect of an aggressive Fed rate hike. But unless the dollar moves sharply in one direction, it is difficult for the gold market to change the current oscillating pattern. 

Leaders of the Group of Seven (G7) held a three-day summit in southern Germany on Sunday (June 26) aimed at demonstrating their unified response to Russia's invasion of Ukraine four months ago. Four of the G7 members, the United Kingdom, the United States, Japan, and Canada, will begin banning imports of Russian gold. The G-7 initiative provided fundamental support for Monday's rally in the gold market. 

Mainstream economists are now generally pessimistic about the future impact of the Fed's rate hike on the market and the global economy. It is believed that the second half of the year will show a relatively large recession, and thus re-evaluate the trend of the dollar, gold by the dollar-linked effect, Tuesday mainly showed a downward trend, this week will also continue to show a downward trend. 

This week's forecast

Due to the impact of the sluggish dollar, interest rate hike expectations have been gradually consumed, which in turn affects the decline in gold prices. This week will still show a downtrend, the price target 1810-1800. 

Technical analysis

Last week so far prices mainly show oscillating market, range in 1816-1847 range. Monday after the opening of the main upward trend, Tuesday began to fall, piercing the Bollinger midline, downward momentum is more powerful. The current price in the 1823 position, mainly shows a low oscillation trend. 

Important information for this week

Wednesday: 20:30 Final U.S. Q1 Real GDP annualized quarterly rate (%) 
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