The European Central Bank's monetary policy tends to be dove, and the yields of US dollars and US bonds rise

The European Central Bank's June interest rate resolution announced on Thursday (June 9) unexpectedly became the thrust of the dollar's further rise. The European Central Bank announced that it would maintain the three key interest rates unchanged, although it made it clear that it would raise interest rates by 25 basis points at the July meeting, and that it would stop net asset purchases from July 1 and raise interest rates again in September. However, due to the conflict between Russia and Ukraine, the inflation rate in the euro zone soared to 8.1% in May, so the market generally characterized the monetary policy position of the European Central Bank as "doves".

In fact, with the Federal Reserve starting to raise interest rates in March, raise interest rates by 50 basis points in May, and start to shrink the table on June 1, major central banks have followed the Federal Reserve's super hawk monetary policy.

On June 2, the Bank of Canada raised interest rates by 50 basis points, the second consecutive 50 basis points increase, and the policy interest rate rose to 1.5%;

On June 7, the Bank of Australia raised interest rates by 50 basis points to 0.85%, which exceeded market expectations. It raised interest rates continuously for two months. In May, the Bank of Australia predicted that CPI would reach 6% by the end of the year;

The market is expected to increase the target range of the federal funds rate to 2.50-2.75% by the end of 2022 (reaching the neutral interest rate level by the end of the year, currently between 0.75% and 1%, and the reduction is roughly equal to raising interest rates by 50 basis points), which is still advantageous compared with the expectation that the European Central Bank will raise interest rates by 140 basis points by the end of the year.

After the announcement of the European Central Bank's interest rate resolution, the US dollar index stabilized at 102.0 and rebounded sharply above the 103.0 level, and the 10-year US bond yield remained above the 3.0% level, which made the interest free asset gold sold off, and the gold fell sharply from a high of US $1858 to a daily low of US $1840.

Investors can focus on the U.S. consumer price index (CPI) in May. Although the market expects the core CPI to increase by 5.9% year-on-year, less than the previous value of 6.2%, the White House has repeatedly said that inflation rose in May, which means that the strong CPI data may make the market further bet on the possibility of the Federal Reserve's aggressive interest rate hike, which is expected to suppress the further decline of gold prices at that time.

The gold 4-hour chart shows that gold has been unable to effectively break through the $1860 level since early June, suggesting strong resistance above. Later, a combination of short phagocytosis and Twilight star etc. turn K-line was formed at 1870 and 1860 respectively, suggesting that short sellers may have regained the initiative.

It is worth noting that the two K-line combinations of short phagocytosis and Twilight star can correspond to the two short-term tops of gold respectively. The author regards $1836 as the neck line level of the double top structure. Once gold effectively breaks through $1836, the future market is expected to test $1814 (the minimum measurement range target of the double top).