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Market News Gold trading reminder: USD and U.S. Treasury yields fell, and gold prices continued their upward trend
Gold trading reminder: USD and U.S. Treasury yields fell, and gold prices continued their upward trend
In the Asian session on October 28, spot gold held steady at around 1795. Gold prices rose slightly on Wednesday, the dollar index fell and US stocks fell to support gold prices, but the strong US data limited its gains.
2021-10-28
7649
On Thursday (October 28) Asian session, spot gold held steady at around 1795. On Wednesday (October 27), the price of gold rose slightly. The decline in the US dollar index and the decline in US stocks supported the price of gold, but the strong US data limited its growth.
In the day, we will focus on the actual GDP of the United States in the third quarter. In addition, the European Central Bank's decision and the Bank of Japan's decision also need to be paid attention to.
[October 27 gold ETF holdings: SPDR gold holdings increased by 3.2 tons]
According to the data of gold ETFs on October 28, as of October 27, the world’s largest gold ETF-SPDR Gold Trust had gold holdings of 983.01 tons, an increase of 3.2 tons from the previous trading day.
[Cyclical stocks drag the S&P 500 index down]
The Nasdaq index of the US stock market closed little on Wednesday. It was boosted by the rise after the announcement of quarterly results by Microsoft and Google's parent company Alphabet. However, the fall in oil prices and the fall in U.S. Treasury yields put pressure on cyclical stocks and suppressed the S&P 500 index.
The S&P 500 fell 0.51%, and the Dow fell 0.74%.
(S&P 500 daily chart)
Microsoft shares rose 4.21% to close at an all-time high after the company predicted strong performance at the end of this calendar year, partly because of its booming cloud business. Alphabet, Google’s parent company, rose 4.96% after the company announced a record quarterly profit, thanks to a surge in advertising sales.
Two stocks contributed nearly 90 points to the Nasdaq index, while Microsoft gave the biggest boost to the Dow, S&P 500 and Nasdaq.
The longer-term U.S. Treasury yields have fallen and the yield curve has flattened, which also supports growth stocks in consumer discretionary and communications services. Only these two types of stocks in the S&P 500 index rose.
The benchmark 10-year U.S. Treasury bond yield fell for the fourth consecutive day, with a decline of more than 6 basis points, which is expected to record the largest one-day decline since August 13.
Megan Horneman, head of portfolio strategy at Verdence Capital Advisors, said that growth companies will get a boost, not only because of some profit news, but also because of lower interest rates. Interest rates are temporarily low because there are some uncertainties from a tax perspective and possible impact.
[The U.S. dollar index fell slightly]
The major currencies stabilized again later on Wednesday, after the unexpected announcement by the Bank of Canada brought some volatility to relatively calm markets.
The U.S. dollar index fell 0.1% late in the session. Earlier, the U.S. dollar weakened against the Canadian dollar, the euro and the yen.
(Daily chart of the US dollar index)
After the Bank of Canada hinted that it might raise interest rates earlier than expected, the U.S. dollar initially fell 0.7% against the Canadian dollar, and then the decline slowed down.
Before the announcement of this hawkish statement, which was regarded as unexpected by some, the Canadian dollar had reached its lowest level against the U.S. dollar in nearly two weeks.
Ed Moya, senior market analyst at brokerage OANDA, said: "You will see more volatility and volatility in the foreign exchange market from now on."
He stated that traders’ inflation expectations for each region will be different, adding that “the spread of certain currencies will be really difficult to calculate.”
At a time when central banks are trying to support recovery from the pandemic without causing sustained inflation, the Bank of Canada’s statement may be the first factor that triggers a reassessment of how interest rates will change and how they will affect currencies.
For the first two days of the week, the foreign exchange market was not very big, as traders suspended their bets and awaited monetary policy statements from major central banks around the world, including the Federal Reserve meeting next week.
[US capital goods orders rose to a record high in September]
New orders for capital goods in the United States rose to a record high in September, and shipments soared, indicating strong corporate equipment spending, but tight supply chains may hinder overall economic growth in the third quarter.
Other data released by the US Department of Commerce on Wednesday strengthened expectations for a slowdown in economic growth. Data show that the US merchandise trade deficit widened sharply last month and exports fell. Although wholesale inventories have increased, retail inventories have declined because, in the context of global semiconductor shortages, the supply of car dealers continues to rapidly decrease.
Last month, orders for non-defense capital goods excluding aircraft increased by 0.8%, setting a record high. This so-called core capital goods order increased by 0.5% in August. Economists surveyed had previously expected that core capital goods orders rose 0.5% in September.
The above report was released before the government released third-quarter gross domestic product (GDP) data on Thursday, prompting some economists to lower their estimates for economic growth. They expect economic growth in the third quarter to be the slowest since the second quarter of 2020 . At that time, the government adopted strict coercive measures to curb the new crown epidemic, which led to a historic economic contraction.
In general, the price of gold is still in an upward trend, and the short-term is still expected to oscillate and strengthen.
(Spot gold daily chart)
GMT+8 836, spot gold was quoted at US$1,795.39 per ounce.
In the day, we will focus on the actual GDP of the United States in the third quarter. In addition, the European Central Bank's decision and the Bank of Japan's decision also need to be paid attention to.
Fundamentals are bullish
[October 27 gold ETF holdings: SPDR gold holdings increased by 3.2 tons]
According to the data of gold ETFs on October 28, as of October 27, the world’s largest gold ETF-SPDR Gold Trust had gold holdings of 983.01 tons, an increase of 3.2 tons from the previous trading day.
[Cyclical stocks drag the S&P 500 index down]
The Nasdaq index of the US stock market closed little on Wednesday. It was boosted by the rise after the announcement of quarterly results by Microsoft and Google's parent company Alphabet. However, the fall in oil prices and the fall in U.S. Treasury yields put pressure on cyclical stocks and suppressed the S&P 500 index.
The S&P 500 fell 0.51%, and the Dow fell 0.74%.
(S&P 500 daily chart)
Microsoft shares rose 4.21% to close at an all-time high after the company predicted strong performance at the end of this calendar year, partly because of its booming cloud business. Alphabet, Google’s parent company, rose 4.96% after the company announced a record quarterly profit, thanks to a surge in advertising sales.
Two stocks contributed nearly 90 points to the Nasdaq index, while Microsoft gave the biggest boost to the Dow, S&P 500 and Nasdaq.
The longer-term U.S. Treasury yields have fallen and the yield curve has flattened, which also supports growth stocks in consumer discretionary and communications services. Only these two types of stocks in the S&P 500 index rose.
The benchmark 10-year U.S. Treasury bond yield fell for the fourth consecutive day, with a decline of more than 6 basis points, which is expected to record the largest one-day decline since August 13.
Megan Horneman, head of portfolio strategy at Verdence Capital Advisors, said that growth companies will get a boost, not only because of some profit news, but also because of lower interest rates. Interest rates are temporarily low because there are some uncertainties from a tax perspective and possible impact.
[The U.S. dollar index fell slightly]
The major currencies stabilized again later on Wednesday, after the unexpected announcement by the Bank of Canada brought some volatility to relatively calm markets.
The U.S. dollar index fell 0.1% late in the session. Earlier, the U.S. dollar weakened against the Canadian dollar, the euro and the yen.
(Daily chart of the US dollar index)
After the Bank of Canada hinted that it might raise interest rates earlier than expected, the U.S. dollar initially fell 0.7% against the Canadian dollar, and then the decline slowed down.
Before the announcement of this hawkish statement, which was regarded as unexpected by some, the Canadian dollar had reached its lowest level against the U.S. dollar in nearly two weeks.
Ed Moya, senior market analyst at brokerage OANDA, said: "You will see more volatility and volatility in the foreign exchange market from now on."
He stated that traders’ inflation expectations for each region will be different, adding that “the spread of certain currencies will be really difficult to calculate.”
At a time when central banks are trying to support recovery from the pandemic without causing sustained inflation, the Bank of Canada’s statement may be the first factor that triggers a reassessment of how interest rates will change and how they will affect currencies.
For the first two days of the week, the foreign exchange market was not very big, as traders suspended their bets and awaited monetary policy statements from major central banks around the world, including the Federal Reserve meeting next week.
Fundamentals are bad
[US capital goods orders rose to a record high in September]
New orders for capital goods in the United States rose to a record high in September, and shipments soared, indicating strong corporate equipment spending, but tight supply chains may hinder overall economic growth in the third quarter.
Other data released by the US Department of Commerce on Wednesday strengthened expectations for a slowdown in economic growth. Data show that the US merchandise trade deficit widened sharply last month and exports fell. Although wholesale inventories have increased, retail inventories have declined because, in the context of global semiconductor shortages, the supply of car dealers continues to rapidly decrease.
Last month, orders for non-defense capital goods excluding aircraft increased by 0.8%, setting a record high. This so-called core capital goods order increased by 0.5% in August. Economists surveyed had previously expected that core capital goods orders rose 0.5% in September.
The above report was released before the government released third-quarter gross domestic product (GDP) data on Thursday, prompting some economists to lower their estimates for economic growth. They expect economic growth in the third quarter to be the slowest since the second quarter of 2020 . At that time, the government adopted strict coercive measures to curb the new crown epidemic, which led to a historic economic contraction.
In general, the price of gold is still in an upward trend, and the short-term is still expected to oscillate and strengthen.
(Spot gold daily chart)
GMT+8 836, spot gold was quoted at US$1,795.39 per ounce.
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