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Market News Gold trading reminder: The Fed hints that it will reduce the code in November and raise interest rates next year! The price of gold rises and falls, or continues to fall

Gold trading reminder: The Fed hints that it will reduce the code in November and raise interest rates next year! The price of gold rises and falls, or continues to fall

In the Asian session on September 23, spot gold held steady at around 1766. On Wednesday, the price of gold rose and fell, because the Fed's latest resolution is inclined to reduce the QE in November, and will start to raise interest rates next year. Intraday news may continue to ferment, and the price of gold may usher in a continuous decline.

Eden
2021-09-23
9255

On Thursday (September 23) Asian session, spot gold price held steady at around 1766. On Wednesday (September 22), the price of gold rose and fell, as Fed officials hinted that they might start to reduce bond purchase plans soon, and revealed that they are increasingly inclined to start raising interest rates in 2022. This news boosted the dollar to record a month. new highs. In addition, the rise in US stocks has led to a rise in risk sentiment, which is also negative for gold prices.

The main focus of the day is the US September Markit manufacturing PMI and the number of initial jobless claims.


Fundamentals are bad


[Powell said the code reduction may start in November]

Fed Chairman Powell said that it may start to reduce the scale of asset purchases as early as November and complete this process by mid-2022. Fed officials have previously revealed that they are increasingly inclined to start raising interest rates in 2022.

Powell said at a press conference after the end of the Fed's policy meeting on Wednesday that the reduction "may be announced at the next meeting at the earliest."

This refers to the policy meeting on November 2-3. However, he also expressed his willingness to wait longer if necessary, and emphasized that the reduction does not mean that the countdown to interest rate hikes has begun.

Powell said: “Scaling down the timing and speed of asset purchases will not directly signal the timing of interest rate hikes.” He also said that he does not expect the Fed to start raising interest rates before the reduction is completed.

James Steel, chief precious metals analyst at HSBC Holdings, wrote in the report that the market will be very sensitive to the timetable for downsizing. The more hawkish the financial market's interpretation of the FOMC, the more likely it is that gold will fall.

[Brazil's central bank raises interest rates due to soaring inflation]

The Brazilian Central Bank raised the benchmark interest rate by one percentage point and promised to raise it again by the same amount at the October meeting to control inflation that is soaring to 10%.

The Central Bank of Brazil decided to raise the Selic interest rate to 6.25% on Wednesday, in line with the expectations of 35 of the 39 economists surveyed. The other four are expected to raise interest rates even more.

The Central Bank of Brazil has raised interest rates by 425 basis points since March, but drastic austerity has almost failed to curb inflation. In August, the inflation rate reached 9.68%.

[The three major U.S. stock indexes all closed up about 1%]

The three major U.S. stock indexes all rose about 1% on Wednesday, and most investors calmly accepted the latest signal from the Fed, including the Fed clearing the way for a quick start to reduce the pace of monthly debt purchases.

Although the stock market fluctuated after the Fed’s latest policy statement and Chairman Powell’s speech, it closed close to the level before the Fed’s statement.

Paul Nolte, portfolio manager at Kingsview Investment Management, said, "They said it might start to shrink, but they didn't say when or how much, so we seem to be back to the state it was a day ago. These are still outstanding issues. In addition. , The financial situation is still very accommodative, which is part of the reason why the market is not crazy at present."

The Dow rose 1%, the S&P 500 rose 0.95%, and the Nasdaq rose 1.02%.

(Dow daily chart)

[The U.S. dollar index rises to a new one-month high]

The U.S. dollar fluctuated on Wednesday, but the Fed’s latest policy statement was hawkish and still helped the U.S. dollar close up 0.27%.

(Daily chart of the US dollar index)

The Fed cleared the way for a "soon" cut in its monthly bond purchase program on Wednesday and hinted that it may raise interest rates faster than expected. Half of the 18 Fed policymakers expect that borrowing costs will need to be increased in 2022.

Steven Violin, portfolio manager of FLPutnam Investment Management Company, said, “From now on, it is very likely that debt purchases will be gradually reduced from November, but this is uncertain. If various risks arise, this still has to meet many thresholds. Conditions and risks include the federal debt ceiling debate, the outlook for the new crown epidemic, and interference in the real estate market."

Fundamentals are bullish


[U.S. second-hand housing sales fell in August]

The decline in second-hand housing sales in the United States in August indicates that demand is slowing, and the decline in housing and high housing prices have caused some buyers to leave the market.

According to data released by the National Association of Realtors (NAR) on Wednesday , second-hand housing sales in August fell 2% from the previous month, at an annual rate of 5.88 million units , in line with economists’ expectations.

NAR Chief Economist Lawrence Yun said in a conference call with reporters: "Obviously, residential sales are slowing down, but they are still higher than pre-epidemic levels."

This decline shows that although financing costs are still at historically low levels, the limited number of properties for sale and soaring house prices are limiting demand. Driven by increased sales of high-end properties, the median selling price of second-hand houses in August rose 14.9% year-on-year to US$356,700.

In general, after Powell's hawk's statement, the news is expected to continue to ferment, and the price of gold may maintain a downward trend in the day.

(Spot gold daily chart)

GMT+8 8:30, spot gold was quoted at US$1,76.15 per ounce.

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