Financial news: gold fell, foreign exchange mt4 MT5 analysis trend

On Friday (July 1), the international gold price fell below the important psychological threshold of US $1800, hitting a new low of US $1795.04 per ounce since May 16. The aggressive monetary policy adopted by major central banks and the rise of the US dollar weakened the attractiveness of gold. But the market is also forming a view that the worst of the gold market may have passed.

At 14:55 Beijing time, spot gold fell 0.57% to $1796.99 / ounce; COMEX gold futures contract fell 0.56% to $1797.2 / ounce; The dollar index rose 0.21% to 104.908.

Economists at dominion securities reported: "Despite the increasing possibility of recession, the gold price is still under pressure. In sharp contrast, the recent trend of the gold price shows that the inflow of safe haven funds has supported the gold. In the past month, the gold price is completely out of line with the market pricing of the Fed's interest rate hike. On the contrary, the relationship between the gold price and the US dollar has been strengthened, which indicates that the special flow scale of gold has become smaller. The liquidity of the global market is drying up, and the gold flow has not been spared 。”

Stephen Innes, executive partner of SPI asset management, said that gold caught up with the downward pace as the Federal Reserve accelerated its interest rate hike and the dollar remained strong... But when the economic recession hit, the central bank needed to loosen policy before the gold price could rebound.

The inflation data of the United States in may hit a new high in nearly 40 years, and there is little suspense about pushing the Federal Reserve to raise interest rates sharply again next month. However, the market is indeed forming a view that the worst period of inflation may have passed.

Rick rule, a famous investment adviser who once served as president and CEO of sprott US Holdings Inc. and now runs rule investment media, said that the Federal Reserve could control inflation by significantly tightening monetary policy for a period of time, but when the economy began to collapse, he believed that the central bank did not have enough funds to follow up.

Rule pointed out that the Federal Reserve cannot raise interest rates close to the level of the free market, because doing so will increase the interest payments of heavily indebted consumers, businesses and the federal government to unsustainable levels.

Powell continues to insist that the central bank can achieve a "soft landing" of the economy while curbing inflation, but this commitment seems questionable. Rule implies that we need a recession to eliminate all misallocations or distortions in the economy, but this means a lot of pain.

Goldman Sachs cited recession concerns and continued inflation as reasons to be bullish on gold. It is expected that gold will rise sharply before the end of the year, raising the target price to $2500 per ounce. The Federal Reserve will raise interest rates enough to break the foam and collapse the economy, which may lead to a pause in price inflation, but the central bank may shift back to interest rate cuts and quantitative easing, which will mean increased long-term inflationary pressure.