Takashi Kabuki『Weekly Gold Price Outlook』 May 30, 2022 issue
Takao Kabuki, the representative director and president of Investment Daily Press Co., Ltd., a venerable figure in cycle analysis, writes a weekly report on the outlook for the gold market.
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Last week's New York gold price closed at $1,851.30 per ounce (near-month), up $9.20 from the previous week. The information related to gold that reached us last week is summarized below (from Jiji Press).
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The early release of April U.S. Personal Consumption Expenditures (PCE) price index showed a year-over-year increase that slowed for the first time in about a year and a half, leading to a decline in U.S. long-term interest rates. This improved the appeal of otherwise non-yielding gold as an investment, and buying interest led the market. If inflation settles, some expect the Fed may skip a rate hike in September. This week, a generally weaker dollar and stronger euro helped support gold. On the day of the release of the PCE index, prices swung briefly, but by the close of trading, activity waned in anticipation of the Memorial Day long weekend on the 30th.
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The slowdown in the rise of interest rates has been keeping gold supported, as noted last week. The price closed at $1,842.10, up $33.90 from the previous week, marking the first five-week positive close in a row. The main driver cited for the rise was the decline in the dollar. The 10-year yield fell to the 2.7% range for the first time in three weeks. Meanwhile, euro strength, supported by rate-hike expectations, put brakes on the dollar-strength trend. … In the last FOMC meeting, there were expectations among some that inflation could be excessive, but in the next stage, concerns about an economic slowdown from stock declines may spread, and rate hikes are expected to pause temporarily. In this column, we have always believed that the Fed’s policy lags, causing current situation awareness to lag and policy to become too hasty.”
The scenario is already surfacing. It was pointed out last week that the Fed might skip a September rate hike for the first time, after previously noting that the likelihood of a recession was rising, but the Fed would not back off…
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【Takao Kabuki — Profile】
Graduated from Kansai Gaidai University, Faculty of Economics. In 1995, partnered with the world-renowned U.S. market analyst Raymond Meriman to issue the domestic first market cycle and astrology report. He is well-regarded for cycle and astrology-based market analysis. Representative Director, Investment Daily Press Co., Ltd.; Representative Director, Investment Daily Press Publishing Co., Ltd.; Director, Wakabaya FX Associates; Member, Japan Technical Analysts Association; Editor-in-Chief, Investment Daily Alpha.
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