Fundamental Analysis
On 12 May, the U.S. dollar index climbed 0.7%, it is the largest increase since 30 April; data showed that this rise of US inflation had the greatest increase since September 2018, that is, the U.S. Consumer Price Index (CPI) rose 0.8% month-on-month in April. This news drove the increase of US Treasury bond yields and the U.S. dollar. As being boosted by the data, the U.S. 10-year treasury bond yield rose to 1.69%. Spot gold price ended its longest consecutive rise in the past month. In late trading day, it fell 1.31%, refreshing the low in the past three trading days to 1813.44 US dollars per ounce, and it is the largest decline since 30 March. Rising treasury yields have weakened the attractiveness of interest-free gold, and a stronger U.S. dollar has made gold more expensive in the eyes of other non-U.S currency investors. At the same time, market expects the Fed to raise interest rate earlier to the end of 2022.
Technical Analysis
In the daily chart, gold price drops sharply, it is temporarily supported by the 1816-1818 area. The MACD upward momentum begins to slow down, RSI indicator falls from a high level. For the 4-hour chart, Bollinger Band becomes wider and slightly tilt down. MACD upward momentum turns from strong to weak, RSI fells below the 50 axis and shifted to the short side. It is expected that the gold price will continue to fall after the rebound today, it would test the possibility of support at 1807. Therefore, we adopt the strategy of short selling on rallies today.
Today’s strategy
Strategy 1: short position around 1824-1825, take profit at 1807, stop loss at 1830
Strategy 2: long position at 1807, take profit at 1817, stop loss at 1798
On 12 May, the U.S. dollar index climbed 0.7%, it is the largest increase since 30 April; data showed that this rise of US inflation had the greatest increase since September 2018, that is, the U.S. Consumer Price Index (CPI) rose 0.8% month-on-month in April. This news drove the increase of US Treasury bond yields and the U.S. dollar. As being boosted by the data, the U.S. 10-year treasury bond yield rose to 1.69%. Spot gold price ended its longest consecutive rise in the past month. In late trading day, it fell 1.31%, refreshing the low in the past three trading days to 1813.44 US dollars per ounce, and it is the largest decline since 30 March. Rising treasury yields have weakened the attractiveness of interest-free gold, and a stronger U.S. dollar has made gold more expensive in the eyes of other non-U.S currency investors. At the same time, market expects the Fed to raise interest rate earlier to the end of 2022.
Technical Analysis
In the daily chart, gold price drops sharply, it is temporarily supported by the 1816-1818 area. The MACD upward momentum begins to slow down, RSI indicator falls from a high level. For the 4-hour chart, Bollinger Band becomes wider and slightly tilt down. MACD upward momentum turns from strong to weak, RSI fells below the 50 axis and shifted to the short side. It is expected that the gold price will continue to fall after the rebound today, it would test the possibility of support at 1807. Therefore, we adopt the strategy of short selling on rallies today.
Today’s strategy
Strategy 1: short position around 1824-1825, take profit at 1807, stop loss at 1830
Strategy 2: long position at 1807, take profit at 1817, stop loss at 1798