Market News Gold market analysis: the Fed's interest rate meeting is coming, gold is hovering in a narrow range, waiting
Gold market analysis: the Fed's interest rate meeting is coming, gold is hovering in a narrow range, waiting
It seems that the Fed will announce at this week's meeting that it will begin to reduce the scale of debt purchases, which will support the dollar and put pressure on gold.
2021-11-02
9220
Gold rose slightly overnight, but it was still below the critical $1,800 threshold and is currently hovering at $1,792.33.
Investors focus on inflation and shrinking the balance sheet. Apart from the obvious signal of the Fed’s FOMC meeting that will attract high attention, the subsequent non-agricultural data on Friday will also be very eye-catching. Inflation continues to worry central bank officials, because supply chain problems continue to exist and energy prices are so high that consumer prices may rise longer than previously thought. In this context, it seems that the Fed will announce at this week's meeting that it will begin to reduce the scale of bond purchases, which will support the dollar and put pressure on gold. This week the Fed will announce the Fed’s November interest rate decision, and will not announce economic expectations and dot-maps, but Powell will hold a press conference. It can be said that global commodity trends will revolve around the tone given by the resolution. So we must maintain a high degree of vigilance. In addition, this week will also announce the US employment data for October. Currently, the market generally expects that the US will add 413,000 new jobs and the unemployment rate will drop to 4.7%. As far as this week is concerned: the current prospects for central bank policy to continue repricing may put more pressure on gold. In addition, the market's expectations that the central bank will tighten monetary policy sooner than expected have become increasingly strong. As inflationary pressures continue to rise, the Fed may have to adopt a more hawkish tone at this week's meeting, either directly announcing or suggesting that it has begun to reduce the scale of asset purchases, and it will continue to expect interest rate hikes in advance. Therefore, the US dollar will be optimistic this week, and the price of gold may be under pressure. However, driven by factors such as rising energy prices, inflationary pressures are continuing to rise, although the Fed's pace of raising interest rates is approaching. However, the federal funds rate futures show that the market has clearly digested the two interest rate hikes next year. There is still a big difference between the eagle and dove factions on the issue of when to raise interest rates within the Fed. Therefore, the blow to gold does not seem to be too heavy. Right now, inflation has become an increasingly critical element in the Fed's assessment of the outlook for monetary policy. There are indications that the shortage of the labor market in the United States is still severe. Affected by the disruption of the supply chain, the global economic recovery has shown signs of stagnation. The Governor of the Bank of England Bailey has admitted that supply bottlenecks and labor shortages are worsening and may curb economic growth and increase inflation in the coming months. It believes that price increases are not "temporary" and that the inflation rate has lasted longer than expected. If central banks choose to tighten policies to deal with inflation, it will depress economic demand and drag down economic growth, but it will not be able to solve the inflation problem caused by the interruption of the supply chain, and stagflation may worsen. As the market becomes more concerned about the risk of stagflation, the price of gold may be expected to usher in a turning point.
Technically: monthly line level; although the trend in October last week received a positive line, it was also operating in shock. Although the shock was reduced, but the indicator signal, although the short signal of KDJ and MACD did not increase significantly, the overall short position still has the advantage of strength. It is also below the middle rail, so there is still a risk of a fall in the monthly chart. The upper part focuses on the initial resistance near the middle rail at 1813 US dollars, and further attention is paid to the 38.2% retracement level near 1836 US dollars, and the lower part focuses on the 50% retracement level near 1761 US dollars. Pay attention to the vicinity of 1730 US dollars.
Bank of China Guangdong Branch Wang Gang
Original title: 20211102-The Fed's meeting on interest rates is coming, gold is hovering in a narrow range to wait
Source: Bank of China official website
Investors focus on inflation and shrinking the balance sheet. Apart from the obvious signal of the Fed’s FOMC meeting that will attract high attention, the subsequent non-agricultural data on Friday will also be very eye-catching. Inflation continues to worry central bank officials, because supply chain problems continue to exist and energy prices are so high that consumer prices may rise longer than previously thought. In this context, it seems that the Fed will announce at this week's meeting that it will begin to reduce the scale of bond purchases, which will support the dollar and put pressure on gold. This week the Fed will announce the Fed’s November interest rate decision, and will not announce economic expectations and dot-maps, but Powell will hold a press conference. It can be said that global commodity trends will revolve around the tone given by the resolution. So we must maintain a high degree of vigilance. In addition, this week will also announce the US employment data for October. Currently, the market generally expects that the US will add 413,000 new jobs and the unemployment rate will drop to 4.7%. As far as this week is concerned: the current prospects for central bank policy to continue repricing may put more pressure on gold. In addition, the market's expectations that the central bank will tighten monetary policy sooner than expected have become increasingly strong. As inflationary pressures continue to rise, the Fed may have to adopt a more hawkish tone at this week's meeting, either directly announcing or suggesting that it has begun to reduce the scale of asset purchases, and it will continue to expect interest rate hikes in advance. Therefore, the US dollar will be optimistic this week, and the price of gold may be under pressure. However, driven by factors such as rising energy prices, inflationary pressures are continuing to rise, although the Fed's pace of raising interest rates is approaching. However, the federal funds rate futures show that the market has clearly digested the two interest rate hikes next year. There is still a big difference between the eagle and dove factions on the issue of when to raise interest rates within the Fed. Therefore, the blow to gold does not seem to be too heavy. Right now, inflation has become an increasingly critical element in the Fed's assessment of the outlook for monetary policy. There are indications that the shortage of the labor market in the United States is still severe. Affected by the disruption of the supply chain, the global economic recovery has shown signs of stagnation. The Governor of the Bank of England Bailey has admitted that supply bottlenecks and labor shortages are worsening and may curb economic growth and increase inflation in the coming months. It believes that price increases are not "temporary" and that the inflation rate has lasted longer than expected. If central banks choose to tighten policies to deal with inflation, it will depress economic demand and drag down economic growth, but it will not be able to solve the inflation problem caused by the interruption of the supply chain, and stagflation may worsen. As the market becomes more concerned about the risk of stagflation, the price of gold may be expected to usher in a turning point.
Technically: monthly line level; although the trend in October last week received a positive line, it was also operating in shock. Although the shock was reduced, but the indicator signal, although the short signal of KDJ and MACD did not increase significantly, the overall short position still has the advantage of strength. It is also below the middle rail, so there is still a risk of a fall in the monthly chart. The upper part focuses on the initial resistance near the middle rail at 1813 US dollars, and further attention is paid to the 38.2% retracement level near 1836 US dollars, and the lower part focuses on the 50% retracement level near 1761 US dollars. Pay attention to the vicinity of 1730 US dollars.
Bank of China Guangdong Branch Wang Gang
Original title: 20211102-The Fed's meeting on interest rates is coming, gold is hovering in a narrow range to wait
Source: Bank of China official website
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