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Fundamentals

During the Asian session on Wednesday (June 15), spot gold fluctuated in a narrow range, currently trading around 1936, temporarily holding the important support of 1932. the Fed announced its interest rate decision in the early hours of the morning, proclaiming a pause of rate hiking in June, ending the previous record of ten consecutive rate hikes. However, the dot plot suggests two more rate hikes (50 bps) during the year, which is more hawkish than expected. Almost all policymakers agree that further rate hikes this year are appropriate, while cutting rates is inappropriate, and the economy is likely to have a soft landing. Currently, as the Fed is ahead of the market again, the market is facing another pricing pressure to rates increasing. Gold prices also retreated under a hawkish tone, in line with our previous expectations. The lowest point also hit the expected important support around 1932, and the next important support is around 1918.

Traders today should focus on the release of the US retail sales monthly rate for May, the US Import Price Index MoM for May, and the US jobless claims for the week ended June 10.

Technical Analysis

Trading at the daily timeframe, gold prices oscillated higher yesterday and briefly rebounded to around 1960 in the evening. Subsequently, gold prices also fell sharply, with the daily chart finally closing a dusk line with a long upper shadow, as the Fed suspended rate hikes as scheduled in the early morning, which also gave a hint for another 50 bps rate hiking this year, exceeded expectations of hawkishness. At present, gold prices have fallen below the bottom of the shock range in the early 1940s, testing the gains and losses of important support at the trend point 1932 once again. So, if gold extends this bearish trend, it is necessary to watch for whether 1932 broke today. An effective broken will lead the support below will be around 1918, although it may only be technical support. If there are no bullish factors to improve the fundamentals recently, then gold prices will fall towards 1900 or even lower in the short term. Besides, gold prices are suppressed by all moving averages for the time being, which are slightly weak. It just needs to follow the trend rather than guess the bottom in the downward retracement. A successful break below 1932 will basically determine the bearish trend of the gold price, which can take short positions for a period of time by the way.

Traders are advised to consider selling high but not chasing short during the day. In a bearish mood, gold should not consider going long without fundamental bullish factors for now. We also highlighted short selling around 1955 yesterday and recommended traders try to take profit at 1940. Later, profits were realized as we expected. Today, if gold rallies around 1945, traders can take a short position lightly with the stop loss set above 1950. The first target is 1932, which can take profit partially and set the stop loss to breakeven, with the second target looking at 1918.

Trading Recommendations

Trading Direction: Short

Entry Price: 1945

Target Price: 1930

Stop Loss: 1955

Support: 1932.000/1918.000

Resistance: 1940.000/1965.000