Takaki Kamiharu "Weekly Silver Market Outlook" June 20, 2022 issue
Takashi Kabuki, the representative director and president of Investment Daily News Co., Ltd., a renowned figure in cycle analysis, writes a weekly report on the outlook for gold prices.
------------------------------------------------------------------
Last week's New York gold price closed at $1,840.60 (near month), down $34.90 from the previous week. The week's high was $1,882.50 on June 13, surpassing the prior week's high of $1,879.60, marking the fifth consecutive week of rising highs, but the closing price fell to a five-week low.
The primary cause appears to be the Federal Reserve's decision last week to raise rates by 75 basis points, a step not seen since November 1994. However, the market had already priced in this move at the time of the announcement, selling off in rates and the dollar, and gold recovered modestly.
Nevertheless, the outcome remains uncertain as to whether the next July meeting will raise rates by 75bp or 50bp. The following is from Jiji Press.
※ ※
The probability of a 75bp rate hike at the July meeting priced into the Fed Funds futures is 78%, while 50bp is 22%. On this day, Minneapolis Fed President Neel Kashkari expressed support for a 75bp move this week and stated that he could also support a similarly sized increase in July. He also cautioned against premature tightening. In response, treasury yields rose temporarily. Economists at Action Economics noted that Kashkari does not currently have a vote on the FOMC, but is known as a dove, so his remarks carried weight. Among the economic data released that day, May industrial production fell 0.1% month over month in manufacturing, contrary to a market forecast of +0.3%, signaling economic slowdown. The 10-year yield stood at 3.239%. By the 14th, it had reached 3.498%, the highest since April 2011. ※ ※
The weekly chart for the 10-year note showed a long upper shadow, and since last two weeks had priced in a 75bp rate hike, this past week saw a retreat as if the materials were exhausted. Moreover, Powell's remark that “0.75% rate hikes are not expected to be the norm” also invited selling. However, since Powell had also indicated, at the May meeting, that “we do not anticipate 0.75% rate hikes in the future” with a dovish nuance, this statement may not carry much credibility. In that sense, a move to test the upper shadow on the weekly chart could be anticipated in the weeks ahead…
Please refer to the PDF file for the continuation.
【Takashi Kabuki Profile】
Graduated from Kwansei Gakuin University School of Economics. In 1995, partnered with the renowned U.S. market analyst Raymond A. Meriman, and published the country’s first market cycle and astrology reports. He is highly regarded for market analysis utilizing cycles and astrology. Representative Director of Investment Daily News Co., Ltd.; Representative Director of Tax Daily News Publishing Co., Ltd.; Director of Wakabayashi FX Associates, Inc.; member of the Japan Technical Analysts Association; Editor-in-Chief of Investment Daily News α.
＊ Please make your final investment decisions at your own responsibility.
＊ Unauthorized copying or distribution of this report constitutes a contract violation. If such violations are detected, legal action may be taken, so please be aware. In addition, even during your subscription period, we may terminate the delivery. Thank you for your understanding.
＊ This report does not guarantee the accuracy of future outlooks or profitability. Traders and readers should trade at their own risk. Neither the author of this report nor the publisher bears responsibility for the decisions of market participants. Regardless of the instrument, whether spot, futures, or options trading, involves high risk.
