On Thursday (June 23), the international gold price weakened, suppressed by the expectation of a substantial interest rate hike from the Federal Reserve. Powell, chairman of the Federal Reserve, doubled his emphasis on fighting inflation at all costs. The stability of the dollar has limited the demand of buyers of other currencies for dollar denominated gold. Gold is expected to fall to $1821 in the aftermarket.
At 14:47 Beijing time, spot gold fell 0.24% to $1833.35 per ounce; COMEX gold futures contract fell 0.19% to $1834.9 / ounce; The US dollar index rose 0.04% to 104.248.
Michael McCarthy, chief strategist of tiger securities in Australia, said: "Powell pointed out overnight that the possibility of a one-time interest rate increase of 1% does exist, which reminds people that we must pay attention to the continuous pressure of rising interest rates on gold prices."
When asked by a member of the Senate Banking Committee whether the Federal Reserve could raise interest rates by up to 100 basis points at a time, Powell said that he would never give up any options, and officials would take all necessary measures to restore price stability.
When there is uncertainty in the political and economic situation, gold is usually regarded as a hedge against inflation and a safe haven asset, but higher interest rates and bond yields raise the opportunity cost of holding non yield asset gold. Powell will testify again in the house of Representatives later on Thursday.
Michael Langford, director of Airguide, a consultancy, said: "it is expected that gold will follow the decline of commodity prices, and it is more likely that the gold price will fall below $1800 / ounce in the next two weeks."
The latest data from the Chicago Mercantile Exchange Group gold futures market showed that the number of gold open overnight contracts fell by only 852, ending three consecutive increases. At the same time, trading volume resumed its decline, with a decrease of about 28100 contracts. The gold price has been hovering around the $1840 area, while the open positions and trading volume have fallen, opening the door to short-term correction, and the price may continue the consolidation mode.
On the daily chart, the gold price started a downward ((III)) wave trend from US $1879, and is expected to fall to the 38.2% target of US $1798. ((III) the wave is the sub wave of the downward C wave since 1998 US dollars. On the hourly chart, the gold price started a downward III wave trend from $1848, and it is expected to explore the 61.8% target of $1826 and 76.4% target of $1821. Wave III is a downward (III) wave starting from $1858. (III) waves are sub waves of ((III)) waves.