The Fed raises interest rates as scheduled and the geopolitical situation supports gold prices

At 2 a.m. Beijing time on Thursday, June 16, the Federal Reserve raised its target interest rate by three-quarters of a percentage point, the largest rate hike since 1994, and expected a slowdown in the economy and job losses in the coming months. rate will rise. Stocks turned decisively higher after Powell told a news conference that a 50 basis point or 75 basis point rate hike was most likely at the next meeting in July, but he did not expect a 75 basis point hike.

​​

The U.S. Commodity Futures Trading Commission CFTC commodity commercial position report shows that as of 2022-06-14 the week (hand) gold long positions increased by 4,961 to 121,926. Hedge funds remained relatively neutral on gold, not taking any major bullish or bearish positions. Gold remains in a tug-of-war between rising inflation and a sharp rate hike by the Federal Reserve.

​​

The Federal Reserve this week hiked interest rates by the most since 1994, as it struggles to rein in soaring inflation. Rising US interest rates have increased the opportunity cost of holding gold as a non-yielding asset. Investors are also worried that higher global interest rates will dampen economic growth, and global stocks are set for their worst week since the March 2020 market crash caused by the outbreak of the virus.

​​

Institutions mainly believe that reality has shown that the current U.S. economic situation is worrying, and it is not as "solid foundation" as Powell said on Wednesday. This view is bullish for gold. Quincy Krosby, chief equity strategist at LPL Financial, questioned Powell's remarks on Wednesday, saying: "The fear in the market is that even before the economy slips into a recession, the Fed's policy blunders will destroy something. The market is also questioning his views on a strong economy. speech."

​​

Gold investors are beginning to realize that the Fed and its leader Powell are in a precarious position, George Milling-Stanley, chief gold strategist at State Street Global Advisors, said on Thursday. "The Fed is walking a very narrow tightrope, and Powell wants to contain some demand issues to bring down inflation, but he doesn't want to push the economy into a recession," he said.

​​

The Russian Ministry of Defense reported that the Russian army destroyed the headquarters of the Ukrainian military force Azov Battalion in the Kharkov region of Ukraine, and hit Ukrainian artillery and mortar positions, rocket artillery systems, Buk air defense missile systems and other military targets . Russian air defense forces also shot down a Ukrainian Su-25 fighter jet. Some Ukrainian militants who were besieged in the Azot chemical plant in Severo-Donetsk have begun to surrender, according to TASS news agency citing Luhansk armed sources on the 17th.

​​

Russian Defense Ministry spokesman Konashenkov said that according to Russian statistics, since the start of the special military operation, a total of 6,956 foreign mercenaries and experts from 64 countries and regions have traveled to Ukraine, of which 1,956 have died and 1,779 have left. Ukraine. Statistical objects include foreign mercenaries who fight directly for the Ukrainian army, as well as foreign experts who assist Ukraine in training soldiers, operating and repairing Western-aided weapons in Ukraine. Konashenkov also said that due to the unfavorable progress of the war in the Ukrainian government, foreign mercenaries began to decrease and leave Ukraine. The Russian Ministry of Defense is tracking and locating every foreign mercenary arriving in Ukraine.

​​

It has remained in the Bollinger Bands indicator channel for a long time and fluctuated widely. During this period, the upper and lower rail interval nodes have been probed back and forth for many times. The Bollinger Bands indicator began to slowly open its mouth after closing. The top suppresses focus on the vicinity of 1878, and the low-level support focuses on the vicinity of 1785. In the short term, the channel may be maintained. Internal shock, the MACD indicator is in a weak shift on the lower side of the 0 axis, and the RSI indicator is in a weak and narrow range arrangement near the 50 balance line, as shown in the figure:

​​

[Disclaimer] This article only represents the author's own point of view and does not constitute any investment advice. Please read it for reference only, and bear all risks and responsibilities.