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Market News International gold prices continue to strengthen, the U.S. index hits a 16-month high, and FED procrastination must be cured as soon as possible
International gold prices continue to strengthen, the U.S. index hits a 16-month high, and FED procrastination must be cured as soon as possible
On November 11, international gold prices continued their upward trend in the past week, and consumer prices in the United States soared, strengthening the charm of precious metals against inflation. However, expectations that the Fed is forced to accelerate the tightening of the currency have also risen, and the U.S. dollar index has also strengthened sharply, rising to a new high of 95.078 since July 23 last year.
2021-11-11
9192
On Thursday (November 11), international gold prices continued their upward trend in the past week, and consumer prices in the United States soared, strengthening the charm of precious metals against inflation. But expectations of the Fed being forced to accelerate the tightening of the currency also rose, and the U.S. index also strengthened sharply at the same time, rising to a new high of 95.076 since July 23 last year.
At GMT+8 16:13, spot gold rose 0.35% to US$1856.01 per ounce; the main COMEX gold contract rose 0.52% to US$1858.0 per ounce; the US dollar index rose 0.20% to 95.071.
Data released overnight showed that in October, US consumer prices recorded the largest year-on-year increase of 6.2% in 31 years. Gold hit a new high since June 15 to $1,685.55 per ounce, and the U.S. index soared nearly 1%.
Gregory Daco, chief economist of the Oxford Economics Institute, believes that this report means that the current price surge has a certain endurance. "In terms of the inflation outlook, I think the situation will continue to deteriorate before it improves, because we think Core inflation will not peak until sometime in early 2022."
Baird investment strategy analyst Ross Mayfield said: "Inflation is indeed the driving force for everything. This will affect Fed policy and fiscal policy. It is a driving factor for interest rates. It is difficult to talk about other topics besides inflation."
Kunal Shah, head of research at Nirmal Bang Commodities, said: “Gold should start to rise from here because inflation expectations are rising and the US economy is slowing.” He added that gold may rise to US$1,900 in the short term.
Shah also said: "As the economic slowdown seems imminent, the demand for gold exchange-traded funds (ETF) should rebound to support this year's prices. We are still heading towards a very challenging period."
But raising interest rates to cool inflation should weigh on gold, because it will increase the opportunity cost of holding gold as a non-interest-bearing asset. This week, several Fed officials expressed their growing concerns about longer-lasting inflation. Even though the Fed’s senior officials still believe that as supply chain problems ease, inflation may slow down, but they now expect this process to continue into 2022. It will take longer than they expected earlier this year, partly because the spread of the delta mutant strain continues a series of economic disturbances.
DailyFX foreign exchange strategist Ilya Spivak said that as the market digests CPI data, (gold) prices may go down, especially in the case of concerns that the Fed may tighten policy more aggressively. "If inflation expectations are deeply rooted, it may start. Affecting consumption may lead to stagflation. But gold is unlikely to benefit from it, because in this case there will be uncertainty in monetary policy, and investors are unlikely to be satisfied with this degree of uncertainty."
At GMT+8 16:13, spot gold rose 0.35% to US$1856.01 per ounce; the main COMEX gold contract rose 0.52% to US$1858.0 per ounce; the US dollar index rose 0.20% to 95.071.
Data released overnight showed that in October, US consumer prices recorded the largest year-on-year increase of 6.2% in 31 years. Gold hit a new high since June 15 to $1,685.55 per ounce, and the U.S. index soared nearly 1%.
Gregory Daco, chief economist of the Oxford Economics Institute, believes that this report means that the current price surge has a certain endurance. "In terms of the inflation outlook, I think the situation will continue to deteriorate before it improves, because we think Core inflation will not peak until sometime in early 2022."
Baird investment strategy analyst Ross Mayfield said: "Inflation is indeed the driving force for everything. This will affect Fed policy and fiscal policy. It is a driving factor for interest rates. It is difficult to talk about other topics besides inflation."
Kunal Shah, head of research at Nirmal Bang Commodities, said: “Gold should start to rise from here because inflation expectations are rising and the US economy is slowing.” He added that gold may rise to US$1,900 in the short term.
Shah also said: "As the economic slowdown seems imminent, the demand for gold exchange-traded funds (ETF) should rebound to support this year's prices. We are still heading towards a very challenging period."
But raising interest rates to cool inflation should weigh on gold, because it will increase the opportunity cost of holding gold as a non-interest-bearing asset. This week, several Fed officials expressed their growing concerns about longer-lasting inflation. Even though the Fed’s senior officials still believe that as supply chain problems ease, inflation may slow down, but they now expect this process to continue into 2022. It will take longer than they expected earlier this year, partly because the spread of the delta mutant strain continues a series of economic disturbances.
DailyFX foreign exchange strategist Ilya Spivak said that as the market digests CPI data, (gold) prices may go down, especially in the case of concerns that the Fed may tighten policy more aggressively. "If inflation expectations are deeply rooted, it may start. Affecting consumption may lead to stagflation. But gold is unlikely to benefit from it, because in this case there will be uncertainty in monetary policy, and investors are unlikely to be satisfied with this degree of uncertainty."
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