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Market News 【Market Morning】 “Eagle" drags gold price hard to move. Nasdaq hits a new high

【Market Morning】 “Eagle" drags gold price hard to move. Nasdaq hits a new high

Gold once fell by more than US$20; Saudi Arabia said OPEC+ played a role in curbing inflation, EIA crude oil inventories fell to lows before the outbreak, oil prices rebounded on Wednesday, and US oil broke the US$74 mark in intraday trading; the stock market will face a full range in the second half of the year. Adjustment? The trend of the three major stock indexes diverged. The S&P ended two consecutive positives and the Nasdaq hit a new high.

TOPONE Markets Analyst
2021-06-24
663

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Gold fails to reverse the decline

Spot gold closed at US$1,778.90 per ounce, up US$0.39 or 0.02%. The US market once hit a low of US$1,773.10 per ounce, down more than US$21 from the high of US$1,794.88 per ounce, but it rebounded from the low in late trading.


COMEX August gold futures closed up 0.3%, at 1,783.40 US dollars per ounce.

Powell's speech on Tuesday reassures investors, who are worried that the Fed's policy will tighten after turning to hawks last week.


However, as the market expected the Fed to tighten policy, the price of gold failed to reverse the 6% decline last week. Higher interest rates mean that the opportunity cost of holding gold is lower, and gold does not pay interest.


In addition, three Fed officials made hawkish remarks during the day, which caused the price of gold to fall below $1780.



Oil price rebounds

There are reports that OPEC+ is considering increasing oil production by 500,000 barrels per day (lower than the consensus estimate of 1 million barrels per day), which has boosted oil prices. The two major crude oil futures rose slightly on Wednesday (June 23).


As of press time, U.S. WTI crude oil August futures rose 23 cents, or 0.30%, to close at $73.08 per barrel. It broke through the $74 mark at one time and reached a daily high of $74.25 per barrel; Brent August futures rose 29 cents, an increase of 0.39%, reported at $75.19 per barrel.


The latest report released by the U.S. Energy Information Administration (EIA) shows that as of the week of June 18, commercial crude oil inventories excluding strategic reserves decreased by 7.614 million barrels to 469 million barrels, the lowest since the week of March 20, 2020. A drop of 1.6%, the largest since the week of April 30, 2021; crude oil imports were the highest since the week of July 3, 2020, crude oil exports fell by 233,000 barrels/day to 3.651 million barrels/day; US domestic crude oil production Decrease by 100,000 barrels to 11.1 million barrels per day.



U.S. dollar rebounds in shock

In the U.S. market, the U.S. dollar index rebounded after hitting a low of 91.52, and ended up slightly at 91.82 in late trading.


Atlanta Fed President Bostic said that because the US economic growth rate is expected to soar to 7% this year, and the inflation rate is much higher than the Fed’s 2% target, he now expects the US to raise interest rates by the end of 2022.


Bostic also said that taking into account the upside surprise, the first interest rate hike has been advanced to the end of 2022, and it is expected that there will be two interest rate hikes in 2023. I don't want to reduce the scale of bond purchases prematurely, but the market is functioning well. He tends to postpone raising interest rates until the bond reduction plan is completed.


Bostic said that the U.S. economy is approaching the "substantially further progress" criteria for starting discussions on bond reductions, and it is entirely appropriate to start discussions on the prospects for reductions. Be flexible and be prepared to act. The issue of debt reduction may be decided within 3-4 months.



Nasdaq hits a new high

The market is concerned about the development of the US infrastructure plan, and a number of economic data have different performances, and some Fed officials have stated that they are expected to raise interest rates in 2022. The three major U.S. stock indexes diverged. The Dow rose at the opening and then fell, and fell further in the end. As of the close, the Dow closed down 72.33 points, or 0.21%, to 33,873.25 points; the S&P 500 index closed down 5.19 points, or 0.12%, to 4,241.24 points, ending the two consecutive trading days of gains. Despite the drop on Wednesday, the index has risen 1.8% so far this week; the Nasdaq rose 18.5 points, or 0.13%, to close at a record 14271.7 points.


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