According to the latest Financial Stability Report released by the Federal Reserve, it warns that although policymakers have taken action to address the pressure on the banking system, concerns about the US economic outlook, credit quality, and liquidity financing may lead to further tightening of credit supply in the economy by banks and other financial institutions. When the credit supply rapidly shrinks, it will push up the financing costs of enterprises and households, leading to a slowdown in economic activity.

The Federal Reserve also stated in the report that sustained inflation and the accompanying monetary tightening policy are important risks facing the US economy, with banking industry volatility being the second largest risk, followed by uncertainty risks in China US relations and commercial real estate outlook. After market participants have digested the content of this report, there should be a need to seek refuge in funds, which should have a driving effect on gold prices.

It can be deployed to establish a good position around $996, with a short-term high gold price of $2034 and a stop loss of $1988.