Huitong Financial APP-As investors nervously await the minutes of the Federal Reserve's latest policy meeting, gold prices experiencetheflyshopViolent fluctuations. On Wednesday (May 22), spot gold prices once fell below the key psychological barrier of US$2410/ounce, and fell 0.0% as of press timetheflyshop.45%, to US$2,409.94 per ounce. This price fluctuation reflects the market's sensitive reaction to the Federal Reserve's policy movements.
Gold Price Correction: Market Sentiment and Technical Analysis
Ole Hansen, head of commodities strategy at Saxo Bank, pointed out that gold is consolidating after experiencing a sharp rise. In the short term, gold may not rise further without additional support from the US dollar and the prospect of interest rate cuts. However, the gold market has been very strong and the buying mentality on dips still exists.
Federal Reserve policymakers: Double game of inflation and interest rates
Recent remarks by U.S. Federal Reserve policymakers reiterated that there has not been enough progress to bring inflation down to the Fed's 2.0% target, so there is no need to cut interest rates. This view has weighed on the price of gold, which, as a non-yielding asset, tends to perform poorly when interest rates are high.
Impact of meeting minutes: Further direction for gold prices
If the minutes of the meeting reflect a stronger stance from policymakers, gold prices are expected to continue to fall. However, minutes from the recent Reserve Bank of Australia (RBA) meeting showed that Reserve Bank of Australia officials had discussed the possibility of raising interest rates, a significant shift in stance.
Long-term prospects for gold: inflation hedging and central bank purchases
Tim Waterrer, chief market analyst at KCM Trade, said in a report that fundamentally, the gold outlook remains constructive, while central bank purchases support demand. If the price of gold is to move in the direction of $2450 again, it needs to first clear the moderate resistance of $2436.
Technical analysis: The test of trend line support
Gold prices fell slightly to support at the trend line, reflecting a short-term uptrend that began in early May. If the correction continues, gold prices could fall to around $2405 at the initial support level of the green trend line. However, the short-, medium-and long-term trends for precious metals are bullish.
Gold Investment Strategies in Uncertainty
As monetary policy became uncertain, the Fed shifted the focus of discussions to "scenario analysis." This shift may provide more details about the method shift. For investors, understanding the Fed's policy trends and market sentiment is crucial to formulating gold investment strategies. Amid the current uncertainty, gold's safe-haven properties and inflation hedging functions still attract investors 'attention.
