A series of US producer price indices for April all exceeded expectations and the previous figures. The previous figures, both month-on-month and year-on-year, were all revised upwards. This forward-looking inflation data reflects that the US cannot ignore the crisis of rising inflation. Concerns that the Federal Reserve will inevitably raise interest rates once or twice in its remaining five policy meetings this year are likely to continue to intensify as oil prices remain high, thus suppressing the risk taking willingness to buy gold.

On the other hand, whether the Xi-Trump meeting in China, held after a nine-year hiatus, will increase investors’ expectations of a warming of Sino-US relations, thus lacking a significant basis for buying gold to hedge against the risk of escalating tensions, remains to be seen how the market digests the different signals released after the two leaders begin their talks.

A short position can be established around $4,749, with a short-term target of $4,652 for profit-taking and a stop-loss at $4,769.

Gold Price 1-Hour Chart:

Ferris Kwok

Chief Analyst
Success Finance Group

Email: ferris.kwok@successfn.com