Tachimuki Takakazu 'Weekly Gold Market Outlook' June 27, 2022 issue
The report on gold price outlook written weekly by Takashi Kabutomaki, president and representative director of Investment Daily News Co., Ltd., and a master of cycle analysis.
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Last week’s New York gold price closed at 1,830.3 dollars per ounce (nearest month), down 10.3 dollars from the previous week. The weekly high/low range was 32.6 dollars, less than half of the prior week’s 76.4 dollars.
Although there were no especially material factors compared with the previous week, a notable development was that the 10-year Treasury yield fell from a high of 3.498% (June 14) to 3.005% by the 23rd, which may have somewhat cushioned the decline in the gold market. At this stage, however, gold remains wary of rising interest rates (downward pressure) strongly. Interestingly, when the yield reached 3.2% on May 9, the gold market fell by 74.6 dollars for the week. This drop is comparable to the decline seen when the FOMC decided on a 0.75% rate hike this month.
As of that time, the adjustment in the 10-year yield involved a two-stage drop, from the high to during the 13–16 day period, a 15.5% decline. Currently, after reaching a high, yields are experiencing a similar two-stage decline; if the same decline rate applies, 2.95% would be the bottom. Around 3% seems to be the first support level. In that sense, the rise in rates from this week could put downward pressure on gold, but it can be said that gold is gradually digesting the rise in rates.
On the other hand, reaction to inflation is also subsiding, which is evident from the gold price and interest rate movements earlier this year.
When gold hit its all-time high (March), interest rates rose in tandem, and gold moved in a fully inflation-conscious pattern. However, since April, inflation has lost some of its material impact on gold.
Nevertheless, this material could again become a catalyst to push gold higher if a further rise in interest rates arrives. But...
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【Takashi Kabutomaki — Profile】
Graduated from Kwansei Gakuin University, Faculty of Economics. In 1995, partnered with the globally renowned U.S. market analyst Raymond Meriman to publish the world’s first domestic market cycle and astrology report. Well regarded for his cycle and astrology-based market analysis. President and CEO of Investment Daily News Co., Ltd.; President and CEO of Investment Daily News Publishing Co., Ltd.; Director of Wakabayashi FX Associates Co., Ltd.; member of the Japan Technical Analysts Association; editor-in-chief of Invesment Daily News Alpha.
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