Gold trading alert: geopolitical tensions + dollar weakness, gold prices five consecutive positive, the market gathered the Fed meeting minutes

By    25 May,2022

During the Asian session on Wednesday (May 25), spot gold oscillated slightly lower and is currently trading at $1,862.37/oz, giving back some of its overnight gains. Tuesday because the U.S. new home sales data fell to a two-year low, the European Central Bank President Lagarde to strengthen the July interest rate hike is expected, the dollar index refresh nearly a month low, to gold prices to provide rebound momentum; in addition, Russia in the U.S. East full-scale offensive attempt to encircle the U.S. Army, Canada to Ukraine to provide another 20,000 rounds of artillery shells, geopolitical tensions also provide support to gold prices. Spot gold closed up 0.7% on Tuesday, closing up for the fifth session. Technically, the market is expected to further test the resistance around the 100-day SMA of 1987.47.


This trading day first ushered in the New Zealand Federal Reserve interest rate resolution, the market is widely expected to raise interest rates by 50 basis points, which will increase the opportunity cost of holding gold, slightly negative gold prices in the short term. More market attention will be gathered at 2:00 am GMT Thursday morning Fed meeting minutes, hawkish is more likely, is expected to limit the upside of gold prices in the short term, but still need to pay attention to the possibility of hawkish less than expected.

Data, the evening will also be out of the U.S. April preliminary monthly durable goods orders, investors need to pay attention to, the market is currently expected to 1.1 from March, down to 0.6, is expected to provide support to gold prices.

The main positive fundamentals

U.S. new home sales fell to a two-year low in April, while home prices surged nearly 20% year-over-year to a record high]

U.S. new single-family home sales fell to a two-year low in April, likely due to rising mortgage rates and soaring prices, pushing first-time buyers and those looking for entry-level properties out of the market.

Sales data released Tuesday by the U.S. Commerce Department fell for the fourth straight month, adding to data released last week showing a sharp drop in single-family home building permits in April and continued weakness in manufactured home sales, suggesting demand in the housing market is cooling.

But a record housing shortage could limit the pace of the slowdown in the housing market, the most interest-rate-sensitive sector of the economy, and the Federal Reserve is raising borrowing costs to dampen domestic demand and curb inflation.

"Property market activity has cooled significantly in recent months as mortgage rates have risen sharply," said Daniel Silver, an analyst at JPMorgan Chase in New York, "and while rising interest rates could weigh on sales, limited inventory and high home prices could also dampen property market activity. "