English
Market News International gold prices fall, FED is expected to announce a withdrawal, and may release new tightening signals
International gold prices fall, FED is expected to announce a withdrawal, and may release new tightening signals
On November 3, international gold prices fell, and traders cautiously awaited the outcome of the Fed’s policy meeting. The Fed may announce that it will reduce its support for the economy and respond to rising inflation risks. Although investors are betting that the central banks of other economies such as the United Kingdom may raise interest rates sooner than the Fed, there are signs that the Fed is more concerned about inflation than previously suggested, which may boost U.S. interest rates and affect the U.S. dollar. Form support.
2021-11-03
11562
On Wednesday (November 3), international gold prices fell, and traders cautiously awaited the outcome of the Fed’s policy meeting. The Fed may announce that it will reduce its support for the economy and respond to rising inflation risks.
At 15:13 GMT+8, spot gold fell 0.38% to US$1780.91 per ounce; the main COMEX gold contract fell 0.45% to US$1781.2 per ounce; the US dollar index fell 0.04% to 94.057.
Gold has traditionally been regarded as a tool to hedge against inflation, but reducing stimulus measures and raising interest rates tends to push up government bond yields, thereby increasing the opportunity cost of holding gold as a non-yielding asset.
It is expected that the Fed will announce a timetable for reducing its stimulus measures later, and may begin to reduce asset purchases by $15 billion per month until the end of mid-2022. Investors will also pay attention to any clues as to when the Fed may raise interest rates to control growing inflationary pressures.
Hitesh Jain, chief analyst at Yes Securities in Mumbai, said: "In the short term, gold may continue to be under pressure because many central banks will tend to normalize monetary policy and gradually reduce asset purchases in response to higher inflation."
Jain said: "However, if the bond market's expectations of higher inflation and lower growth in the next few years, that is, stagflation, are correct, this should be quite good for gold." He pointed out that the longer-term U.S. bond yields are depressed. Reflects concerns about stagflation.
Market participants are also paying attention to the new monetary policy to be announced by the Bank of England on Thursday (November 4). Previous data showed that the unemployment rate is unlikely to rise sharply, providing a new basis for the Bank of England to raise interest rates.
Some investors are betting that the central banks of other economies such as the United Kingdom may raise interest rates sooner than the Fed in response to the surge in global inflation. However, there are signs that the Fed is more concerned about inflation than previously suggested, which may boost US interest rates and support the US dollar.
Brian Rose, a senior analyst at UBS Global Wealth Management, said: "We look forward to the general rise of the U.S. dollar, and we believe that the U.S. dollar will rise further. As the Fed moves toward shrinking stimulus, this should support the U.S. dollar."
John Hardy, head of foreign exchange strategy at Saxo Bank, said: “The market has taken a very tough stance on the central bank’s plans in many places. In other words, I expect the U.S. dollar to be roughly flat by the end of the quarter, but weaker next year."
At 15:13 GMT+8, spot gold fell 0.38% to US$1780.91 per ounce; the main COMEX gold contract fell 0.45% to US$1781.2 per ounce; the US dollar index fell 0.04% to 94.057.
Gold has traditionally been regarded as a tool to hedge against inflation, but reducing stimulus measures and raising interest rates tends to push up government bond yields, thereby increasing the opportunity cost of holding gold as a non-yielding asset.
It is expected that the Fed will announce a timetable for reducing its stimulus measures later, and may begin to reduce asset purchases by $15 billion per month until the end of mid-2022. Investors will also pay attention to any clues as to when the Fed may raise interest rates to control growing inflationary pressures.
Hitesh Jain, chief analyst at Yes Securities in Mumbai, said: "In the short term, gold may continue to be under pressure because many central banks will tend to normalize monetary policy and gradually reduce asset purchases in response to higher inflation."
Jain said: "However, if the bond market's expectations of higher inflation and lower growth in the next few years, that is, stagflation, are correct, this should be quite good for gold." He pointed out that the longer-term U.S. bond yields are depressed. Reflects concerns about stagflation.
Market participants are also paying attention to the new monetary policy to be announced by the Bank of England on Thursday (November 4). Previous data showed that the unemployment rate is unlikely to rise sharply, providing a new basis for the Bank of England to raise interest rates.
Some investors are betting that the central banks of other economies such as the United Kingdom may raise interest rates sooner than the Fed in response to the surge in global inflation. However, there are signs that the Fed is more concerned about inflation than previously suggested, which may boost US interest rates and support the US dollar.
Brian Rose, a senior analyst at UBS Global Wealth Management, said: "We look forward to the general rise of the U.S. dollar, and we believe that the U.S. dollar will rise further. As the Fed moves toward shrinking stimulus, this should support the U.S. dollar."
John Hardy, head of foreign exchange strategy at Saxo Bank, said: “The market has taken a very tough stance on the central bank’s plans in many places. In other words, I expect the U.S. dollar to be roughly flat by the end of the quarter, but weaker next year."
Bonus rebate to help investors grow in the trading world!
Or try Free Demo Trading
