Market News Gold trading reminder: The "pigeon" of the global central bank is loud, and after the price of gold has risen sharply, the key resistance near 1835 is pointed!
Gold trading reminder: The "pigeon" of the global central bank is loud, and after the price of gold has risen sharply, the key resistance near 1835 is pointed!
Last week, because the Federal Reserve, the Bank of England and the European Central Bank all released dovish signals, helping the price of gold break the 1,800 mark, and hit a new high in the past two months to 1818.38 US dollars per ounce. The survey shows that institutional investors and retail investors are inclined to Bullish outlook, the price of gold is expected to further test the resistance near the high point of 1834 since mid-June this week. In addition, the US passed an infrastructure bill with a total scale of more than 1 trillion over the weekend, which means that the market will inject more liquidity, which is expected to provide further upward momentum for gold prices.
2021-11-08
9736
On Monday (November 8) Asian time, spot gold fluctuated in a narrow range above 1810, holding most of last week’s gains. Last week, the Fed, the Bank of England and the European Central Bank all released dovish signals, helping the gold price to break through. 1800 mark, and once hit a new high in the past two months to 1818.38 US dollars per ounce, the survey shows that institutional investors and retail investors are inclined to bullish the market outlook, gold prices this week is expected to further test the resistance near the high point of 1834 since mid-June.
On July 15 and September 3, the price of gold failed to rise above the resistance twice. Once the price of gold broke the resistance, the medium and long-term bullish signal was increased. In addition, the US passed an infrastructure bill with a total scale of more than 1 trillion over the weekend, which means that the market will inject more liquidity, which is expected to provide further upward momentum for gold prices.
[The U.S. passes the 1.2 trillion infrastructure bill]
On the evening of last Friday (November 5) local time, the two parties passed a $550 billion bill with a vote of 228-206-the funds will be used to build new roads and bridges, as well as broadband, clean water, and power grid upgrades. , Pollution cleanup and other priorities-Biden said he will sign the bill soon, but not this weekend. The Senate passed the bill in August.
Passing the above-mentioned infrastructure bill (the total scale including conventional road spending exceeds US$1.2 trillion) allows Biden to focus on the second US$1.75 trillion economic plan, which aims to expand the federal government’s support for childcare and preschool Educational support to combat climate change and increase the tax burden on businesses and the wealthy. The Democratic Party is still negotiating the details.
U.S. President Biden said he is confident that moderate Democrats can work together to pass the social spending bill. But he refused to disclose whether any lawmakers gave him private assurances that they would not hinder the passage of the bill. ?
The Speaker of the U.S. House of Representatives, Pelosi, said he hopes to pass President Biden's social spending bill before Thanksgiving (November 25).
Under normal circumstances, expanding fiscal expenditure tends to benefit gold prices.
[Traders postpone their bets on the Bank of England to raise interest rates, and it is expected that the benchmark interest rate will not reach 1% in 2022]
Before the policy meeting of the Bank of England last Thursday (November 4), the market had completely digested the expectations of interest rate hikes. But the interest rate hike in the UK eventually failed, and the money market currently expects the Bank of England to maintain low interest rates for a longer period of time.
Traders no longer fully price the Bank of England’s key interest rate to reach 1% next year, and it is now expected to reach this level in early 2023. Before the Bank of England meeting last Thursday, the market's forecast was to reach 1% in August next year.
Many market participants were disappointed that the Governor of the Bank of England Bailey did not counter the market’s rate hike pricing.
[European Central Bank policymakers expect inflation to fall next year, implying that the conditions for raising interest rates will not be met next year]
European Central Bank policymakers said last week that inflation in the euro zone will decline next year, although the rate of decline is slower than originally expected, suggesting that the conditions for raising interest rates next year will not be met.
Policy makers including Deputy Governor Dekindos Management Committee and Austrian Central Bank Governor Holtzmann and Greek Central Bank Governor Stornaras all stated that inflation will fall next year, and the European Central Bank President Lagarde It is consistent with the remarks of the executive committee Schnabel.
Holzman said that interest rate hikes in 2022 may even be counterproductive. According to the central bank's current guidelines, it is unlikely to raise interest rates next year. De Jindos said that inflation is falling at a slower rate than previously expected, and some price pressures may become more persistent.
[The 10-year U.S. Treasury yield fell below the important moving average, and the market expects the Fed to raise interest rates later]
Despite stronger-than-expected employment data, U.S. Treasury bonds soared last Friday, recording the biggest two-day gain in more than a year.
British government bonds led the rise of global government bonds for the second consecutive day, as investors expected the Bank of England to maintain ultra-low interest rates for a longer period of time.
The 10-year U.S. Treasury bond yield fell 7.8 basis points to 1.45%, falling below the 50-day and 200-day moving averages for the first time since September. In the past two trading days, the yield has fallen by a total of 14 basis points, which is set to hit the biggest drop since June 2020. The yield on British 10-year government bonds fell by 23 basis points over the same period.
Praveen Korapaty, head of interest rate strategy at Goldman Sachs, said, “The non-agricultural employment report itself should be conducive to rising yields, but in view of the results of the Bank of England yesterday’s meeting, the market is reflecting on how aggressive the central bank will be on inflation.”
The yield on the US 2-year Treasury bond fell by 3.8 basis points on Friday, and fell by 4.1 basis points on Thursday. Since the Bank of England unexpectedly left interest rates unchanged, the yield on British 2-year government bonds has fallen by more than 30 basis points.
Last week, the Federal Reserve announced that it began to reduce the scale of asset purchases this month. At the rate announced, the code reduction may end in mid-2022. However, the actual speed will be adjusted according to economic conditions such as employment indicators.
After the Bank of England's interest rate decision was announced on Thursday, the US short-term interest rate market pushed back expectations for the time of the Fed's first interest rate hike. It is currently expected that the first interest rate hike will be in September next year and the second in February the following year. Previously, the market predicted that interest rates would be raised twice next year, the first in July.
Alex Li, head of US interest rate strategy at Credit Agricole Bank, believes that the flattening of the yield curve last Friday is in line with this expected change in the market.
The rise in U.S. Treasuries may also be due in part to short covering. The number of open interest in U.S. Treasury futures on the Chicago Mercantile Exchange fell sharply, especially for 2-year Treasury futures, where open positions fell by 2.3%, the largest drop in three weeks.
The Federal Reserve's interest rate decision is slightly dovish, the Bank of England unexpectedly did not raise interest rates, and the European Central Bank reiterated that it will not raise interest rates next year. All of these provide confidence to the gold bulls, and the decline in U.S. bond yields also means that the opportunity cost of holding gold has fallen. All provided upward momentum for gold prices.
(Spot gold daily chart)
[The net long US dollar position of speculators fell to the lowest in five weeks in the past week]
According to data released by the US Commodity Futures Trading Commission (CFTC) on Friday, the size of net long US dollar positions held by speculators in the past week fell to the lowest since the end of September.
As of the week of November 2, the size of the US dollar net long position fell to 19.51 billion US dollars, from 20.07 billion US dollars in the previous week. The size of US dollar net long positions has fallen for the fourth consecutive week.
The US dollar position of the Chicago International Moary Market is calculated based on the net positions of the six major currencies, the Japanese yen, the euro, the British pound, the Swiss franc, the Canadian dollar and the Australian dollar.
This means that the upward momentum of the US dollar in the medium and long term has weakened, which favors the price of gold.
[Europe has re-emerged as the "epicenter" of the epidemic, and many countries have upgraded their control measures]
The European Regional Office of the World Health Organization issued a warning last week that the new crown epidemic in more than 50 countries in the region is worrying, and the European region has once again become the "epicenter" of the new crown epidemic. The director of the office, Klug, pointed out that inadequate vaccination coverage in some countries and relaxation of social health control measures are the main reasons for the current intensification of the epidemic in the European region.
According to statistics released by the WHO Regional Office for Europe on November 4, the region reported nearly 1.8 million new confirmed cases of new crowns and 24,000 new deaths last week, an increase of 6% and 24,000 respectively compared with the previous week. 12%, accounting for 59% and 48% of new confirmed cases and deaths worldwide that week. The number of new confirmed cases reported in the European Region has increased by more than 55% in the past 4 weeks.
Klug said: "In the past week, the rate of hospitalizations for the new crown in the European region has more than doubled. Following this trend, another 500,000 new crown deaths may be added by February next year."
According to data released by the Robert Koch Institute, a German disease control agency, on November 5, the country has 37,120 new confirmed cases of new crowns compared with the previous day, a record high since the outbreak.
Nicolas Metty, an infectious disease expert at the French public health department, told the media on November 4: "The incidence of the new crown in France has been on the rise for three consecutive weeks."
Since the Netherlands announced the removal of most of the new crown prevention and control measures at the end of September, the country's epidemic rebound has gradually intensified. According to data released by the National Institute of Public Health and Environment of the Netherlands on the 2nd, in the week starting on October 27, the country had 834 new hospitalized cases of new coronary disease, an increase of 31% over the previous week; 140 new severe cases were added, compared with the previous week. Increase by 20% in one week.
What is worrying is that the positive rate of the new coronavirus test and the risk of re-infection in countries in the European region have increased.
According to data from the Romanian Health Department on November 5, there were 3,176 new deaths from the new crown in the country in the past week, one of the countries with the highest death rate from the new crown in the European region.
In addition, Poland's increasing number of confirmed cases of new crowns has also recently hit new highs.
On the whole, the continuation of the new crown epidemic has provided gold prices with hedging support, which is also one of the reasons why gold prices remain high.
[Pfizer's new crown oral drug is effective and will apply for emergency use authorization as soon as possible]
Pfizer said its Covid-19 drug has reduced the hospitalization and mortality of high-risk patients by 89%. This result may have a disruptive impact on the treatment of the new crown disease and change the trajectory of the epidemic.
Pfizer said in a statement last Friday that due to its remarkable efficacy, the drug is no longer accepting new patients in clinical trials. The company plans to submit the results of the study to US regulators as soon as possible to apply for emergency use authorization.
Pfizer's clinical trial results show that there are now two drug candidates for the treatment of patients with early-stage COVID-19. Last month, Merck and its partner Ridgeback Biotherapeutics LP submitted their experimental drug to regulators. Previous studies have shown that the drug reduces the risk of severe illness or death in patients with mild to moderate Covid-19 by half.
As long as it can be widely promoted, a drug that can be self-administered at home as soon as the new crown symptoms appear can become a key tool to contain the global epidemic. A Pfizer spokesperson said that applications will be submitted to regulatory agencies in other countries shortly after the application is submitted in the United States.
Pfizer said that in a trial of 1,219 unvaccinated adults, if the drug is started within three or five days of the onset of symptoms, it can significantly reduce the hospitalization rate. The drug, called Paxlovid, can be combined with an enzyme called a protease to prevent the virus from replicating itself. Some AIDS drugs have similar effects.
Overall, only 0.8% of people who started Paxlovid treatment within three days of onset of symptoms were hospitalized and no one died, while 7% of those who used placebo were hospitalized or died later. The results of starting the drug within five days of the onset of symptoms are similar. Pfizer said that the results have not been published in medical journals and are of high statistical significance.
The news slightly boosted the market's confidence in defeating the global new crown epidemic, and tended to increase the market's willingness to take risks, which was slightly negative for gold prices.
[U.S. employment growth exceeded expectations in October to polish the economic outlook, the unemployment rate fell to the lowest in 19 months]
As the obstacles brought about by the new crown epidemic subsided in the summer, employment growth in the United States exceeded expectations in October, which provided more evidence for economic activity to resume momentum at the beginning of the fourth quarter.
The employment report of the US Department of Labor shows that non-agricultural employment positions increased by 531,000 in October, an estimated 450,000. The September employment data was revised up to 312,000, from the previous value of 194,000. The unemployment rate fell to 4.6% from 4.8% in September, the lowest in 19 months. The labor force participation rate remained unchanged at 61.6%. Average hourly wages rose 0.4% month-on-month, and the year-on-year increase rose from 4.6% in September to 4.9%, the largest increase in eight months.
The data shows that the situation in the job market is more optimistic than previously expected. The reduction in the number of new crown cases and higher salaries have helped employers fill near-record job vacancies. At the same time, with millions of Americans still on the sidelines of the job market, the labor force participation rate has hardly changed in recent months.
These data support the Fed’s decision last week to reduce bond purchases.
Sal Guatieri, a senior economist at Markets, said in a report, “The continued weakness in the employment participation rate will only contribute to the decline in the unemployment rate, which is likely to cause the Fed to accelerate the pace of downsizing and raise interest rates earlier.”
After the data was released, the price of gold fell briefly last Friday, but it quickly turned into a rise.
Analysts pointed out that rising wages may mean that as labor, raw materials and transportation costs rise, more companies will raise prices to protect profit margins, thereby boosting inflation. Driven by supply chain disruptions and supply shortages, inflation has reached its highest level in three decades. Investors tend to buy gold to protect against inflation.
John Briggs, director of global strategy at NatWest Markets, said that the number of new non-agricultural jobs in October was 531,000, higher than the estimated median of 450,000, which is a "good number", but "not strong enough to speed up the Fed's downsizing. , The extent of the interest rate hike schedule".
Last week, 18 Wall Street analysts participated in the Kitco News gold survey. Among the respondents, 10 analysts (56%) believe that the price of gold will rise this week. At the same time, 2 analysts (11%) are short on gold recently, and 6 analysts (33%) hold a neutral view.
At the same time, a total of 622 people participated in the online voting for ordinary investors. Among these respondents, 326 (52%) expect the price of gold to rise this week. Another 188 people (30%) expect the price of gold to fall, and 108 people (17%) hold the same expectations.
Investors this week focused on the impact of the U.S. Infrastructure Act. At the same time, they paid attention to the performance of the U.S. PPI, CPI and consumer confidence index in October. In addition, they need to pay attention to the speeches of the Federal Reserve and other global central bank officials and news related to the new crown epidemic.
Adrian Day, president of Adrian Day Asset Management, said he is bullish on gold because the Fed "is exaggerating, in terms of inflation, it is doing too little and too late."
But some analysts say that gold must exceed $1835 to regain its brilliance and attract new momentum.
Phillip Streible, chief market strategist at Blue Line Futures, said he is also looking at $1,835. He added that before breaking through this level, he held a neutral attitude towards gold. "The price of gold closed above US$1835, and you will see all the short exits, and the price of gold really started to explode."
Marc Chandler, managing director of Bannockburn Global Forex, said he does not believe that the price of gold is ready for a breakthrough. He added that the Consumer Price Index (CPI) announced this week may eventually push interest rates and the U.S. dollar higher, which will depress gold prices.
GMT+8 08:12, spot gold is now quoted at US$1814.90 per ounce.
On July 15 and September 3, the price of gold failed to rise above the resistance twice. Once the price of gold broke the resistance, the medium and long-term bullish signal was increased. In addition, the US passed an infrastructure bill with a total scale of more than 1 trillion over the weekend, which means that the market will inject more liquidity, which is expected to provide further upward momentum for gold prices.
The fundamentals are mainly bullish
[The U.S. passes the 1.2 trillion infrastructure bill]
On the evening of last Friday (November 5) local time, the two parties passed a $550 billion bill with a vote of 228-206-the funds will be used to build new roads and bridges, as well as broadband, clean water, and power grid upgrades. , Pollution cleanup and other priorities-Biden said he will sign the bill soon, but not this weekend. The Senate passed the bill in August.
Passing the above-mentioned infrastructure bill (the total scale including conventional road spending exceeds US$1.2 trillion) allows Biden to focus on the second US$1.75 trillion economic plan, which aims to expand the federal government’s support for childcare and preschool Educational support to combat climate change and increase the tax burden on businesses and the wealthy. The Democratic Party is still negotiating the details.
U.S. President Biden said he is confident that moderate Democrats can work together to pass the social spending bill. But he refused to disclose whether any lawmakers gave him private assurances that they would not hinder the passage of the bill. ?
The Speaker of the U.S. House of Representatives, Pelosi, said he hopes to pass President Biden's social spending bill before Thanksgiving (November 25).
Under normal circumstances, expanding fiscal expenditure tends to benefit gold prices.
[Traders postpone their bets on the Bank of England to raise interest rates, and it is expected that the benchmark interest rate will not reach 1% in 2022]
Before the policy meeting of the Bank of England last Thursday (November 4), the market had completely digested the expectations of interest rate hikes. But the interest rate hike in the UK eventually failed, and the money market currently expects the Bank of England to maintain low interest rates for a longer period of time.
Traders no longer fully price the Bank of England’s key interest rate to reach 1% next year, and it is now expected to reach this level in early 2023. Before the Bank of England meeting last Thursday, the market's forecast was to reach 1% in August next year.
Many market participants were disappointed that the Governor of the Bank of England Bailey did not counter the market’s rate hike pricing.
[European Central Bank policymakers expect inflation to fall next year, implying that the conditions for raising interest rates will not be met next year]
European Central Bank policymakers said last week that inflation in the euro zone will decline next year, although the rate of decline is slower than originally expected, suggesting that the conditions for raising interest rates next year will not be met.
Policy makers including Deputy Governor Dekindos Management Committee and Austrian Central Bank Governor Holtzmann and Greek Central Bank Governor Stornaras all stated that inflation will fall next year, and the European Central Bank President Lagarde It is consistent with the remarks of the executive committee Schnabel.
Holzman said that interest rate hikes in 2022 may even be counterproductive. According to the central bank's current guidelines, it is unlikely to raise interest rates next year. De Jindos said that inflation is falling at a slower rate than previously expected, and some price pressures may become more persistent.
[The 10-year U.S. Treasury yield fell below the important moving average, and the market expects the Fed to raise interest rates later]
Despite stronger-than-expected employment data, U.S. Treasury bonds soared last Friday, recording the biggest two-day gain in more than a year.
British government bonds led the rise of global government bonds for the second consecutive day, as investors expected the Bank of England to maintain ultra-low interest rates for a longer period of time.
The 10-year U.S. Treasury bond yield fell 7.8 basis points to 1.45%, falling below the 50-day and 200-day moving averages for the first time since September. In the past two trading days, the yield has fallen by a total of 14 basis points, which is set to hit the biggest drop since June 2020. The yield on British 10-year government bonds fell by 23 basis points over the same period.
Praveen Korapaty, head of interest rate strategy at Goldman Sachs, said, “The non-agricultural employment report itself should be conducive to rising yields, but in view of the results of the Bank of England yesterday’s meeting, the market is reflecting on how aggressive the central bank will be on inflation.”
The yield on the US 2-year Treasury bond fell by 3.8 basis points on Friday, and fell by 4.1 basis points on Thursday. Since the Bank of England unexpectedly left interest rates unchanged, the yield on British 2-year government bonds has fallen by more than 30 basis points.
Last week, the Federal Reserve announced that it began to reduce the scale of asset purchases this month. At the rate announced, the code reduction may end in mid-2022. However, the actual speed will be adjusted according to economic conditions such as employment indicators.
After the Bank of England's interest rate decision was announced on Thursday, the US short-term interest rate market pushed back expectations for the time of the Fed's first interest rate hike. It is currently expected that the first interest rate hike will be in September next year and the second in February the following year. Previously, the market predicted that interest rates would be raised twice next year, the first in July.
Alex Li, head of US interest rate strategy at Credit Agricole Bank, believes that the flattening of the yield curve last Friday is in line with this expected change in the market.
The rise in U.S. Treasuries may also be due in part to short covering. The number of open interest in U.S. Treasury futures on the Chicago Mercantile Exchange fell sharply, especially for 2-year Treasury futures, where open positions fell by 2.3%, the largest drop in three weeks.
The Federal Reserve's interest rate decision is slightly dovish, the Bank of England unexpectedly did not raise interest rates, and the European Central Bank reiterated that it will not raise interest rates next year. All of these provide confidence to the gold bulls, and the decline in U.S. bond yields also means that the opportunity cost of holding gold has fallen. All provided upward momentum for gold prices.
(Spot gold daily chart)
[The net long US dollar position of speculators fell to the lowest in five weeks in the past week]
According to data released by the US Commodity Futures Trading Commission (CFTC) on Friday, the size of net long US dollar positions held by speculators in the past week fell to the lowest since the end of September.
As of the week of November 2, the size of the US dollar net long position fell to 19.51 billion US dollars, from 20.07 billion US dollars in the previous week. The size of US dollar net long positions has fallen for the fourth consecutive week.
The US dollar position of the Chicago International Moary Market is calculated based on the net positions of the six major currencies, the Japanese yen, the euro, the British pound, the Swiss franc, the Canadian dollar and the Australian dollar.
This means that the upward momentum of the US dollar in the medium and long term has weakened, which favors the price of gold.
[Europe has re-emerged as the "epicenter" of the epidemic, and many countries have upgraded their control measures]
The European Regional Office of the World Health Organization issued a warning last week that the new crown epidemic in more than 50 countries in the region is worrying, and the European region has once again become the "epicenter" of the new crown epidemic. The director of the office, Klug, pointed out that inadequate vaccination coverage in some countries and relaxation of social health control measures are the main reasons for the current intensification of the epidemic in the European region.
According to statistics released by the WHO Regional Office for Europe on November 4, the region reported nearly 1.8 million new confirmed cases of new crowns and 24,000 new deaths last week, an increase of 6% and 24,000 respectively compared with the previous week. 12%, accounting for 59% and 48% of new confirmed cases and deaths worldwide that week. The number of new confirmed cases reported in the European Region has increased by more than 55% in the past 4 weeks.
Klug said: "In the past week, the rate of hospitalizations for the new crown in the European region has more than doubled. Following this trend, another 500,000 new crown deaths may be added by February next year."
According to data released by the Robert Koch Institute, a German disease control agency, on November 5, the country has 37,120 new confirmed cases of new crowns compared with the previous day, a record high since the outbreak.
Nicolas Metty, an infectious disease expert at the French public health department, told the media on November 4: "The incidence of the new crown in France has been on the rise for three consecutive weeks."
Since the Netherlands announced the removal of most of the new crown prevention and control measures at the end of September, the country's epidemic rebound has gradually intensified. According to data released by the National Institute of Public Health and Environment of the Netherlands on the 2nd, in the week starting on October 27, the country had 834 new hospitalized cases of new coronary disease, an increase of 31% over the previous week; 140 new severe cases were added, compared with the previous week. Increase by 20% in one week.
What is worrying is that the positive rate of the new coronavirus test and the risk of re-infection in countries in the European region have increased.
According to data from the Romanian Health Department on November 5, there were 3,176 new deaths from the new crown in the country in the past week, one of the countries with the highest death rate from the new crown in the European region.
In addition, Poland's increasing number of confirmed cases of new crowns has also recently hit new highs.
On the whole, the continuation of the new crown epidemic has provided gold prices with hedging support, which is also one of the reasons why gold prices remain high.
Fundamentals are mainly negative
[Pfizer's new crown oral drug is effective and will apply for emergency use authorization as soon as possible]
Pfizer said its Covid-19 drug has reduced the hospitalization and mortality of high-risk patients by 89%. This result may have a disruptive impact on the treatment of the new crown disease and change the trajectory of the epidemic.
Pfizer said in a statement last Friday that due to its remarkable efficacy, the drug is no longer accepting new patients in clinical trials. The company plans to submit the results of the study to US regulators as soon as possible to apply for emergency use authorization.
Pfizer's clinical trial results show that there are now two drug candidates for the treatment of patients with early-stage COVID-19. Last month, Merck and its partner Ridgeback Biotherapeutics LP submitted their experimental drug to regulators. Previous studies have shown that the drug reduces the risk of severe illness or death in patients with mild to moderate Covid-19 by half.
As long as it can be widely promoted, a drug that can be self-administered at home as soon as the new crown symptoms appear can become a key tool to contain the global epidemic. A Pfizer spokesperson said that applications will be submitted to regulatory agencies in other countries shortly after the application is submitted in the United States.
Pfizer said that in a trial of 1,219 unvaccinated adults, if the drug is started within three or five days of the onset of symptoms, it can significantly reduce the hospitalization rate. The drug, called Paxlovid, can be combined with an enzyme called a protease to prevent the virus from replicating itself. Some AIDS drugs have similar effects.
Overall, only 0.8% of people who started Paxlovid treatment within three days of onset of symptoms were hospitalized and no one died, while 7% of those who used placebo were hospitalized or died later. The results of starting the drug within five days of the onset of symptoms are similar. Pfizer said that the results have not been published in medical journals and are of high statistical significance.
The news slightly boosted the market's confidence in defeating the global new crown epidemic, and tended to increase the market's willingness to take risks, which was slightly negative for gold prices.
[U.S. employment growth exceeded expectations in October to polish the economic outlook, the unemployment rate fell to the lowest in 19 months]
As the obstacles brought about by the new crown epidemic subsided in the summer, employment growth in the United States exceeded expectations in October, which provided more evidence for economic activity to resume momentum at the beginning of the fourth quarter.
The employment report of the US Department of Labor shows that non-agricultural employment positions increased by 531,000 in October, an estimated 450,000. The September employment data was revised up to 312,000, from the previous value of 194,000. The unemployment rate fell to 4.6% from 4.8% in September, the lowest in 19 months. The labor force participation rate remained unchanged at 61.6%. Average hourly wages rose 0.4% month-on-month, and the year-on-year increase rose from 4.6% in September to 4.9%, the largest increase in eight months.
The data shows that the situation in the job market is more optimistic than previously expected. The reduction in the number of new crown cases and higher salaries have helped employers fill near-record job vacancies. At the same time, with millions of Americans still on the sidelines of the job market, the labor force participation rate has hardly changed in recent months.
These data support the Fed’s decision last week to reduce bond purchases.
Sal Guatieri, a senior economist at Markets, said in a report, “The continued weakness in the employment participation rate will only contribute to the decline in the unemployment rate, which is likely to cause the Fed to accelerate the pace of downsizing and raise interest rates earlier.”
After the data was released, the price of gold fell briefly last Friday, but it quickly turned into a rise.
Analysts pointed out that rising wages may mean that as labor, raw materials and transportation costs rise, more companies will raise prices to protect profit margins, thereby boosting inflation. Driven by supply chain disruptions and supply shortages, inflation has reached its highest level in three decades. Investors tend to buy gold to protect against inflation.
John Briggs, director of global strategy at NatWest Markets, said that the number of new non-agricultural jobs in October was 531,000, higher than the estimated median of 450,000, which is a "good number", but "not strong enough to speed up the Fed's downsizing. , The extent of the interest rate hike schedule".
Prospects
Last week, 18 Wall Street analysts participated in the Kitco News gold survey. Among the respondents, 10 analysts (56%) believe that the price of gold will rise this week. At the same time, 2 analysts (11%) are short on gold recently, and 6 analysts (33%) hold a neutral view.
At the same time, a total of 622 people participated in the online voting for ordinary investors. Among these respondents, 326 (52%) expect the price of gold to rise this week. Another 188 people (30%) expect the price of gold to fall, and 108 people (17%) hold the same expectations.
Investors this week focused on the impact of the U.S. Infrastructure Act. At the same time, they paid attention to the performance of the U.S. PPI, CPI and consumer confidence index in October. In addition, they need to pay attention to the speeches of the Federal Reserve and other global central bank officials and news related to the new crown epidemic.
Adrian Day, president of Adrian Day Asset Management, said he is bullish on gold because the Fed "is exaggerating, in terms of inflation, it is doing too little and too late."
But some analysts say that gold must exceed $1835 to regain its brilliance and attract new momentum.
Phillip Streible, chief market strategist at Blue Line Futures, said he is also looking at $1,835. He added that before breaking through this level, he held a neutral attitude towards gold. "The price of gold closed above US$1835, and you will see all the short exits, and the price of gold really started to explode."
Marc Chandler, managing director of Bannockburn Global Forex, said he does not believe that the price of gold is ready for a breakthrough. He added that the Consumer Price Index (CPI) announced this week may eventually push interest rates and the U.S. dollar higher, which will depress gold prices.
GMT+8 08:12, spot gold is now quoted at US$1814.90 per ounce.
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