Last week, the international gold price finally couldn't hold up, and gold has not fallen so much since the Silicon Valley bank thunderstorm in March.
Last week, gold prices were mainly affected by debt ceiling negotiations, and the White House once released news that a debt ceiling agreement was expected to avoid debt default. In addition, a number of data released last week showed that the US economy is still relatively strong, such as the number of initial jobless claims in the United States for the week ended May 13 was only 242,000, which is not only less than the previous week, but also less than expected, indicating that employment is still very strong.
In addition, the US retail sales data in April, known as the horror data, is also good, April is also much better than March, in March it was -0.60%, and April has returned to a positive 0.4%.
Such good data has made expectations of a Fed rate cut begin to fade, after the market had expected the Fed to cut interest rates in the middle of the year, and now the timing of the rate cut has returned to November.
A series of bearish news has suppressed the confidence of gold bulls, so I will add a little confidence to the bulls.
Now the focus of the market is on the progress of the negotiations on the US debt ceiling, and it can be said that the negotiation process is also full of twists and turns. It was good to talk before, so the price of gold fell. But last Friday night, the situation changed, Biden went to Japan to participate in the G7 summit just left, the remaining Republican negotiators picked the back foot, according to media reports, talking and talking, Republican representatives angrily left the scene, bluntly saying that the White House is "unreasonable." After this news came out, gold prices immediately rebounded sharply.
Now the latest news is that US House Speaker Kevin McCarthy said on May 20 that the White House and Republican negotiators did not arrange a meeting that day. Negotiations on the debt ceiling will be suspended until Biden returns. Biden was even more anxious, and immediately instructed his assistants to arrange a call with McCarthy on Sunday.
With less than 10 days to go, all kinds of outcomes are possible. In short, the expiration of the US debt ceiling on June 1 is a risk point, and everyone should be mentally prepared. After the negotiation, the short-term is not good for gold, and the demand for gold safe-haven has weakened. But the medium and long term is still positive, because the result of the negotiations is that the Treasury will continue to issue bonds, the Federal Reserve will continue to print money, and the dollar will continue to depreciate. If it is not properly negotiated, gold will have safe-haven demand, and silver may have relatively large turbulence. But you have to believe that in the end it will be done, so if gold and silver fall sharply, it is an opportunity to buy.
In addition, due to the depreciation of the RMB, the decline in domestic gold and silver prices last week was not obvious, Shanghai gold fell slightly, and Shanghai silver basically did not fall.
The Shanghai Bank 2306 contract in my hand has not moved except for some on May 12, but this week I am ready to move my position, and at the same time reduce the position a little more, if the US debt ceiling collapses, there may be an opportunity to pick up bargains.
The above views do not constitute investment advice, investment is risky, and caution is required when entering the market.