Thursday, august 22, when the increase in gold cooled, the market remained focused on the united statesInterest rate reductionOn top of that, and in the midst of fear of recessionGold pricesFrom historical heights。
Cash gold fell by 1. 10 per cent and was reported at $2484. 74 per ounce. The round-the-clock delivery was in the $2514. 74-2470. 92 ounce zone, followed by a significant downswing towards the opening of the united states stock, and the release of u. S. House sales data at 22:00 beijing time was brought down to $2470. 92 ounces. Cash and silver dropped 2. 08 per cent to $28. 9855 per ounce. Comex gold futures dropped by 1. 08 per cent to $2520. 10 per ounce; comex silver futures dropped by 2. 16 per cent to $28. 990 per ounce。
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(post gold trend, source: fx168)
Market news analysis
As the gold rises in history, so many days later, the gold risesFederal reserveThe minutes of the meeting in late july showed that, with progress in reducing inflation, policymakers largely supported lower interest rates。
Cme fedwatch showed that the minutes of the meeting had consolidated the bet on the september easing policy, despite differences among traders on 25 or 50 basis points。
The minutes of the july fed meeting were biased towards pigeons, making it clear that the fed would reduce interest rates in september. This is the most information the fed’s chairman, jerome powell, can give in his speech at jackson hall on friday, because the fed decides policy at every meeting. This would conflict the (over)optimistic expectations of traders of four interest-rate reductions by the end of the year with the possibility that the fed would reduce interest rates only twice or three times. The interesting thing about the proceedings is that some fed officials believe that if the fed sends a signal and the market has digested the interest rate reduction expectations, labour market data have deteriorated to a level sufficient to allow them to support the rate reduction. The vast majority of people think it is possible to reduce the interest rate in september, so it's a matter of nails. As can be seen, as of december, swap pricing shows a reduction of about 95 basis points, which means that the fed will reduce interest rates at each of the three remaining meetings of the year, one of which will be a significant reduction。
An eminent economist, mohamed el-erian, has said that traders have exaggerated the possibility of a substantial reduction in the fed’s interest rate by the end of the year. “it seems to me that this is problematic, with the market expecting too many cuts.” "they think a little too much." in el-erian's view, it would be more realistic to bet that the fed would reduce the total interest rate by 75 basis points by the end of the year。
The comments of the chairman of the kansas city federal reserve, jeffrey schmid, among others, are very optimistic. The current market forecast suggests that the fed is more likely to skip the november meeting to agree on a reduction in interest rates, so that the interest rate on federal funds will eventually be reduced by only 50 basis points this year. However, any increase in the rate of return would be attractive. The rate of return on the united states treasury debt for the two-year period, sensitive to interest rates, has recovered to over 4 per cent, a level that may attract investors to lock on the rate of return, as the fed's slow rate reduction will accelerate as the data begin to portend the economic downturn。
Some views were also expressed by the chairman of the boston federal reserve, susan collins, who stated that the labour market was healthy and added that the recent reduction was appropriate. Recently, the chairman of the philadelphia federal reserve, patrick harker, agreed with collins on the idea of easing policies, but added that the fed should systematically reduce interest rates。
Although collins and harker's views suggest that the federal reserve would decline interest rates for the first time, this non-revenue metal has fallen。
In the united states, monthly standard global manufacturing, pmi again contracted to 48. 0; the service sector rose to 55. 2 and was more than expected. Following the release of pmi data, the benchmark 10 year-old united states treasury rate of return continued to increase, forcing gold/dollars to remain vulnerable. In new york, the 10-year base country debt return rose by 5. 87 basis points in the united states, reporting 3. 8597 per cent, and was delivered between 3. 785. 9 per cent and 3. 8749 per cent. The overall shock went up during the release of data on the eurozone pmi, the united states pmi, the united states house of representatives, etc. The three-year united states debt yield increased by 7. 51 basis points, reporting 4. 0056 per cent, to 3. 9194 per cent to 4. 0183 per cent. America's bond rate of return has pushed the dollar up. The united states dollar index (dxy) tracking the value of the united states dollar against the other six currencies increased by 0. 39 per cent to 101. 52。
While concerns about the economic downturn have limited the broader risk preferences of financial markets, gold has fallen in some cases, and the dollar has risen from its low point of about seven months。
The focus is on fed chairman jay. Rom powell addressed jackson hall on friday。
Lower interest rates augur well for gold because they reduce the opportunity cost of investing in unproductive assets. Other precious metals were affected by this small increase, but mainly followed by gold。
According to daniel ghali, a senior dominican commodity strategist, high deficits, slow growth, persistent inflation, currency depreciation and the upcoming interest-rate cycle have attracted capital to the gold market, “our analysis based on flows now shows that downside risks are greater. After all, the holding of macro-funds is currently at their highest level since the peak of the epidemic. Statistically, this is more in line with the federal reserve's interest rate decline of 370 basis points over the next 12 months. The cta is actually "the biggest multiple." the outflow of chinese gold etf funds has recovered.” “in the face of weak currency, stock and real estate markets, gold is attractive. The gold market's narratives are consistently rising and there is almost unanimous agreement that the price of gold will rise, but we believe that there are significant risks to the short-term prospects associated with holding stock.” jackson hall is the first potential catalyst, but the next non-agricultural employment data release may be a more important potential catalyst.”
According to analysts, this year seems to be the year of the gold harvest, driven by geopolitical upheavals, the presidential election in the united states and the imminent move by the fed to reduce interest rates. Although the price of gold has fallen from historical highs, the outlook continues to rise. Currently, the value of a 400 ounce of gold is more than us$ 1 million, and the price of gold is at a new high of us$ 2,500 per ounce. Global central banks have increased their reserves of gold, and investors are pouring into precious metals-supported etfs. Futures curves show that the outlook for gold prices is still rising in the near future. History shows that gold tends to perform well when rates of return fall。
Sb strategists, joni teves, and others, have said that factors that support the price of gold include growing interest in the upcoming us elections and their corresponding impact on fiscal policy, as well as the fed’s expectations, the weakening of the dollar, and continuing geopolitical risks. The inverse relationship between the price of gold and the real interest rate “ seems to be stabilizing”. In-kind demand will rebound and seasonal demand will pick up during key weddings and festivals in india, especially in the context of lower import duties and strong economies。
Next week, focus on financial data and events
1 07:01 gfk consumer confidence index, august
2 07:30 core ci annual rate in japan july
3. 08:30 the president of the central bank of japan and the minister of finance attended the hearing
4:20:30 monthly retail sales rate in canada june
5,22:00 annualization of total new house sales in the united states in july
6. 22 p. M. Address by united states federal reserve chairman powell
7-23:00 address by barley, governor of the british central bank
8:30 united states federal reserve gulsby interview
Total oil drilling in the united states of america through 23 august
