Investing Strategy: June 14th Fed's cool view on inflation, gold price continues to fall

Following the decline in CPI, the overnight release of PPI data reignited enthusiasm for easing inflation. However, the Federal Reserve remains indifferent, sticking to a hawkish policy stance, which has pressured gold prices downwards. Specifically, the U.S. PPI for May fell by 0.2% month-on-month, marking the largest drop in seven months. The report also showed that the core PPI for May was below the expected 0.3% increase, indicating an easing of inflationary pressures. Additionally, the number of initial jobless claims rose to the highest level in nine months, further cooling the labor market and signaling slower economic growth in the U.S. Despite this data reinforcing the confidence in rate cuts, the Federal Reserve maintains a hawkish stance, and gold prices are influenced by the Fed's actions, leading to volatile downward movements.

Today's trading focus is on the Bank of Japan's interest rate decision, with the market keenly observing whether the normalization of monetary policy will proceed smoothly. The market anticipates that the current policy rate will remain unchanged, with the short-term rate expected to stay between 0.0% and 0.1%. The money market forecasts indicate a 91% chance of rates remaining unchanged and only a 9% likelihood of a 10 basis point increase. Additionally, market attention will turn to the government bond purchase plan, as media reports suggest that as the Bank of Japan gradually normalizes policy, it may assess the need to reduce the monthly purchase of approximately 6 trillion yen in government bonds.

II. Technical Analysis: Gold

From the one-hour gold chart above, the price continues its decline from the 2449.0 level, reaching a new overnight low of 2295.0, with the trading focus continuing to shift downwards, suggesting a bearish market trend. In terms of the moving average system, the short-term 60-day moving average has crossed below the 100-day moving average, both turning downwards to form a bearish death cross structure, indicating a bearish trend in gold prices. The MACD indicator below has crossed below the zero axis from above, showing continued bearish momentum. The main trading strategy should focus on short positions, with a suggested entry near the first resistance level at 2315.0, targeting the first support level at 2295.0 and, if broken, further testing the previous low of 2287.0.

Intraday Trading Strategy:

Short Position: Attempt short positions near 2312.2014, with a stop loss at 2320 and targets at 2302.0 and around 2293.