English
Market News Spot gold fell, the U.S. index hit a 21-year high, and Biden indicated "important tasks" to the Fed
Spot gold fell, the U.S. index hit a 21-year high, and Biden indicated "important tasks" to the Fed
On Thursday (May 12), spot gold fell again. Although high inflation has brought benefits to the price of gold, the market is worried that the Fed's possible aggressive water-receiving policy to curb inflation will damage the economy. US President Biden also reiterated that control Inflation is the top priority, which makes investors prefer to hold the dollar, the dollar index hit a new high since mid-December 2002 to 104.73.
2022-05-12
8293
On Thursday (May 12), spot gold fell again. Although high inflation has brought benefits to the price of gold, the market is worried that the Fed's possible aggressive water-receiving policy to curb inflation will damage the economy. US President Biden also reiterated that control Inflation is the top priority, which makes investors prefer to hold the dollar, the dollar index hit a new high since mid-December 2002 to 104.73.
At GMT+8 20:06, spot gold fell 0.61% to $1840.98 per ounce; the main COMEX gold futures contract fell 0.71% to $1840.8 per ounce; the US dollar index rose 0.64% to 104.657.
The upward pressure on U.S. prices in April eased from that in March, but the year-on-year increase of 8.3% was still more than three times the 2% target set by the Federal Reserve, and may remain at a high level for a long time. growth and therefore tend to hold dollars.
St. Louis Fed President Bullard said on Wednesday (May 11) that U.S. inflation is still "overheated", but the Fed's current plan (50 basis points each of the next two meetings) is good, and the Fed does not have a single meeting directly. A plan to raise rates by 75 basis points.
Bullard has been the most vocal advocate of Fed policymakers for accelerating the pace of rate hikes. But his latest remarks suggest that Fed policymakers back Chairman Powell's plan last week to raise rates by 50 basis points at each of the next two meetings, and that the Fed needs to do more about the outlook for inflation and its impact on the economy inventory.
The U.S. Federal Reserve raised interest rates by 50 basis points last week, the largest single rate hike in nearly 22 years, as it tightened its ultra-loose monetary policy during the pandemic. But Fed policymakers also don’t want to weaken the labor market and avoid a prolonged downturn.
"The country's battle with high inflation is not over, but the market can still breathe a sigh of relief that it hasn't gotten any worse and the Fed can hike rates by 50 percent in June and July as planned," said Christopher Rupkey, chief economist at FWDBONDS in New York. 1 basis point, there is no reason to act more quickly to fight inflation."
But Bullard also said that there may be ups and downs in the real economy, and how the Fed will act in the future still depends on the performance of newly released economic data. "I think it's more up to the country... We hope that with each policy meeting, inflation will ease significantly...but we don't want to commit today to what we're going to do in December."
The rise in borrowing costs is designed to slow households' demand for goods and services and businesses' demand for workers fast enough to cool price and wage pressures and bring inflation down to the Fed's 2% target.
Veronica Clark, an economist at Citigroup in New York, said: "As service prices continue to rise further, it may become increasingly difficult for the Fed to deny that a wage price spiral is taking place, and recognizing this means the market faces further hawkishness on Fed policy. risks of."
ING economists say there are no signs the Fed will become more accommodative in this tightening cycle, and the Fed has more reason than most other central banks to cut its policy rate to neutral, which should support the dollar in the coming months core narrative.
U.S. President Joe Biden on Wednesday (May 11) again acknowledged that inflation was "unacceptably high" and was causing pain to American households, and reiterated that lowering prices "is the government's top economic priority."
"While it was heartening to see inflation slowing in April, the fact remains that inflation is unacceptably high," Biden said. "While I would never interfere with the independence of the Fed, I believe we have built a strong economy. And the labor market, Chairman Powell said last week that inflation is the number one threat, and I'm sure the Fed will keep that in mind. In addition to the Fed (tightening monetary policy), the government plans to focus on lowering the cost of household spending and lowering the federal deficit."
Biden also blamed the Russian-Ukrainian war for soaring global inflation. But inflation, already a chronic disease of the global economy before the outbreak of war on Feb. 24, could now intensify and prolong the Fed's inflation battle as the U.S. government floods the economy with relief money during the pandemic.
Supply chain bottlenecks are becoming more apparent as the economy recovers as a large number of workers leave the job market. Summer demand for services such as air travel and hotel accommodation, as well as labor shortages, are likely to keep inflation high.
Matt Simpson, senior market analyst at City Index, said in a report that despite high inflation expectations and new inflows into the gold market, it is not known whether gold prices have formed an important support near $1,830.
On the hourly chart, the price of gold started a downward iii wave from $1,910, and the bottom support looked at the 61.8% target of $1,818. On the daily line, wave iii is a sub-wave of the downward (c) wave that started from $1998. The (c) wave is the sub-wave of the downward ((ii)) wave that started from $2,070, and the lower support looks at the 100% target at $1,817.
At GMT+8 20:06, spot gold fell 0.61% to $1840.98 per ounce; the main COMEX gold futures contract fell 0.71% to $1840.8 per ounce; the US dollar index rose 0.64% to 104.657.
Inflation expected to remain high for a long time
The upward pressure on U.S. prices in April eased from that in March, but the year-on-year increase of 8.3% was still more than three times the 2% target set by the Federal Reserve, and may remain at a high level for a long time. growth and therefore tend to hold dollars.
St. Louis Fed President Bullard said on Wednesday (May 11) that U.S. inflation is still "overheated", but the Fed's current plan (50 basis points each of the next two meetings) is good, and the Fed does not have a single meeting directly. A plan to raise rates by 75 basis points.
Bullard has been the most vocal advocate of Fed policymakers for accelerating the pace of rate hikes. But his latest remarks suggest that Fed policymakers back Chairman Powell's plan last week to raise rates by 50 basis points at each of the next two meetings, and that the Fed needs to do more about the outlook for inflation and its impact on the economy inventory.
The U.S. Federal Reserve raised interest rates by 50 basis points last week, the largest single rate hike in nearly 22 years, as it tightened its ultra-loose monetary policy during the pandemic. But Fed policymakers also don’t want to weaken the labor market and avoid a prolonged downturn.
"The country's battle with high inflation is not over, but the market can still breathe a sigh of relief that it hasn't gotten any worse and the Fed can hike rates by 50 percent in June and July as planned," said Christopher Rupkey, chief economist at FWDBONDS in New York. 1 basis point, there is no reason to act more quickly to fight inflation."
The Fed will continue to be data-only
But Bullard also said that there may be ups and downs in the real economy, and how the Fed will act in the future still depends on the performance of newly released economic data. "I think it's more up to the country... We hope that with each policy meeting, inflation will ease significantly...but we don't want to commit today to what we're going to do in December."
The rise in borrowing costs is designed to slow households' demand for goods and services and businesses' demand for workers fast enough to cool price and wage pressures and bring inflation down to the Fed's 2% target.
Veronica Clark, an economist at Citigroup in New York, said: "As service prices continue to rise further, it may become increasingly difficult for the Fed to deny that a wage price spiral is taking place, and recognizing this means the market faces further hawkishness on Fed policy. risks of."
ING economists say there are no signs the Fed will become more accommodative in this tightening cycle, and the Fed has more reason than most other central banks to cut its policy rate to neutral, which should support the dollar in the coming months core narrative.
Biden reiterates 'top priority'
U.S. President Joe Biden on Wednesday (May 11) again acknowledged that inflation was "unacceptably high" and was causing pain to American households, and reiterated that lowering prices "is the government's top economic priority."
"While it was heartening to see inflation slowing in April, the fact remains that inflation is unacceptably high," Biden said. "While I would never interfere with the independence of the Fed, I believe we have built a strong economy. And the labor market, Chairman Powell said last week that inflation is the number one threat, and I'm sure the Fed will keep that in mind. In addition to the Fed (tightening monetary policy), the government plans to focus on lowering the cost of household spending and lowering the federal deficit."
Biden also blamed the Russian-Ukrainian war for soaring global inflation. But inflation, already a chronic disease of the global economy before the outbreak of war on Feb. 24, could now intensify and prolong the Fed's inflation battle as the U.S. government floods the economy with relief money during the pandemic.
Supply chain bottlenecks are becoming more apparent as the economy recovers as a large number of workers leave the job market. Summer demand for services such as air travel and hotel accommodation, as well as labor shortages, are likely to keep inflation high.
Matt Simpson, senior market analyst at City Index, said in a report that despite high inflation expectations and new inflows into the gold market, it is not known whether gold prices have formed an important support near $1,830.
Spot gold looks at $1818
On the hourly chart, the price of gold started a downward iii wave from $1,910, and the bottom support looked at the 61.8% target of $1,818. On the daily line, wave iii is a sub-wave of the downward (c) wave that started from $1998. The (c) wave is the sub-wave of the downward ((ii)) wave that started from $2,070, and the lower support looks at the 100% target at $1,817.
Bonus rebate to help investors grow in the trading world!
Or try Free Demo Trading
