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Market News The international gold price hits a six-day high, and the Fed has no perfect plan to fight inflation
The international gold price hits a six-day high, and the Fed has no perfect plan to fight inflation
On Friday (May 20), the international gold price hit a new high of $1849.30 per ounce in six trading days, continuing the overnight rebound momentum. The dollar index is expected to be further away from the more than 21-year high of 105.02 set last week. Worries intensified. Chairman Jerome Powell publicly acknowledged this week that "pain" may be inevitable as the central bank goes all out to target inflation.
2022-05-20
8308
On Friday (May 20), the international gold price hit a new high of $1849.30 per ounce in six trading days, continuing the overnight rebound. The dollar index is expected to be further away from the more than 21-year high of 105.02 set last week. Worries intensified.
At GMT+8 15:22, spot gold rose 0.28% to US$1,846.94 per ounce; the main COMEX gold futures contract rose 0.21% to US$1,845.1 per ounce; the US dollar index rose 0.07% to 102.96.
The U.S. dollar index refreshed its lowest level since May 5 to 102.65 overnight. The Federal Reserve will raise interest rates by the end of the year higher than expected a month ago, a survey found, keeping already significant recession risks in place, although the Fed's aggressive rate hike path and quantitative tightening are bullish for the dollar.
The Fed is under intense pressure, with the worst inflation in more than 40 years requiring it to prioritize reining in price increases. Chairman Jerome Powell publicly acknowledged this week that "pain" may be inevitable as the central bank goes all out to target inflation.
The Fed's aggressive monetary policy stance in fighting inflation sparked a sell-off in stocks, and several retailers, including Walmart (WMT.N) this week cut their full-year profit forecasts, warning that inflation is squeezing profits.
Bill Adams, chief economist at ComericaBank in Dallas, Texas, said: "This will lead to slower job growth in the retail and e-commerce industries, and the stock market sell-off could dampen business sentiment and make some companies more cautious about hiring, especially Those that are cash-flow negative and, like many startups, rely on investor money to fund their operations.”
Stephen Roach, former Asia chairman of Morgan Stanley, said stagflation is making a comeback. He warned that the U.S. was on a dangerous path that would lead to higher prices and slower growth.
"This inflation problem is widespread and likely to be protracted, and the market hasn't even fully factored in the full extent needed to control the demand side... It just underscores where (Fed Chair) Powell is currently," Roach told CNBC on Thursday. the pit."
At GMT+8 15:22, spot gold rose 0.28% to US$1,846.94 per ounce; the main COMEX gold futures contract rose 0.21% to US$1,845.1 per ounce; the US dollar index rose 0.07% to 102.96.
The U.S. dollar index refreshed its lowest level since May 5 to 102.65 overnight. The Federal Reserve will raise interest rates by the end of the year higher than expected a month ago, a survey found, keeping already significant recession risks in place, although the Fed's aggressive rate hike path and quantitative tightening are bullish for the dollar.
The Fed is under intense pressure, with the worst inflation in more than 40 years requiring it to prioritize reining in price increases. Chairman Jerome Powell publicly acknowledged this week that "pain" may be inevitable as the central bank goes all out to target inflation.
The Fed's aggressive monetary policy stance in fighting inflation sparked a sell-off in stocks, and several retailers, including Walmart (WMT.N) this week cut their full-year profit forecasts, warning that inflation is squeezing profits.
Bill Adams, chief economist at ComericaBank in Dallas, Texas, said: "This will lead to slower job growth in the retail and e-commerce industries, and the stock market sell-off could dampen business sentiment and make some companies more cautious about hiring, especially Those that are cash-flow negative and, like many startups, rely on investor money to fund their operations.”
Stephen Roach, former Asia chairman of Morgan Stanley, said stagflation is making a comeback. He warned that the U.S. was on a dangerous path that would lead to higher prices and slower growth.
"This inflation problem is widespread and likely to be protracted, and the market hasn't even fully factored in the full extent needed to control the demand side... It just underscores where (Fed Chair) Powell is currently," Roach told CNBC on Thursday. the pit."
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