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Market News The international gold price stays away from the three-week low, Powell is not anxious, and the market focus shifts to them
The international gold price stays away from the three-week low, Powell is not anxious, and the market focus shifts to them
On November 4, international gold prices rose, far away from the low point of $1759.01 per ounce set overnight since October 13. The Fed plans to cut stimulus, but will not raise interest rates for a period of time, which makes investors feel relieved. At present, the focus is shifting to GMT+8 20 o’clock in the New Deal to be announced by the Bank of England, and the market is expected to raise interest rates. The United States will release the October non-agricultural employment report on Friday.
2021-11-04
10802
On Thursday (November 4), international gold prices rose and stayed away from the low point of US$1759.01 per ounce set overnight since October 13th. The Fed plans to cut stimulus, but will not raise interest rates for a period of time, which makes investors feel relieved.
At GMT+8 16:43, spot gold rose by 0.37% to US$1776.38 per ounce; the main COMEX gold contract rose by 0.76% to US$1777.4 per ounce; the US dollar index rose by 0.35% to 94.190.
The Fed said overnight that it would reduce its monthly asset purchases by US$120 billion at a rate of US$15 billion per month, and plans to completely end its bond purchase program in mid-2022. The decision is in line with market expectations.
The Fed's decision-makers judged that it may be appropriate to reduce net asset purchases on a similar scale each month, but if the economic outlook changes, it will be ready to adjust the pace of purchases. Chairman Powell said that if the economy continues to develop as expected, the Fed may complete the reduction action before the middle of next year. He emphasized that officials can flexibly speed up or slow down the pace of reduction in accordance with economic conditions.
But Powell hinted at the press conference that he would remain patient before raising interest rates and wait for further employment growth. However, Powell admits that inflation is disturbingly high, and he blames it on the “turbulence” of the global supply chain, which may continue into the second half of next year, and it will also bring to the fixed-income or lower-income households. Come to challenge.
Powell said that for now, the Fed will remain "patient" when deciding when to raise interest rates. "We don't think it is time to raise interest rates. To achieve full employment, some progress needs to be made." This is intensifying with the financial market. The bet is the opposite. The market predicts that inflation will prompt the Fed to end its support for the economy during the pandemic earlier.
In fact, in recent weeks, investors have paid more attention to the Fed’s response to the sharp rise in prices than the downsizing of bonds. In the past five months, inflation has been at twice the Fed’s target. The price surge is expected to last much longer than the Fed expected in the spring of this year.
Powell admits that there is uncertainty, but this is only part of the reason why the Fed should not raise interest rates hastily. The inflation trend is likely to satisfy the Fed's interest rate hike threshold, but it may still fall on its own. First, we must achieve full employment, so that workers have more time to return to employment.
Joseph LaVorgna, Chief Economist of the United States at Natixis, said: "They are hedging bets, but this is nothing new, because they have publicly stated that their confidence that inflation will fall back as quickly as they imagined has fallen."
Stephen Innes, managing partner of SPI Asset Management, said that the Fed’s views will benefit the price of gold. Until the Fed decides to raise interest rates, the price of gold will continue to rise. For some signs of the United States, such as wage growth, the Fed will not spend too much time to accelerate the reduction of debt purchases."
Michael Langford, director of the corporate advisory company AirGuide, predicts that the price of gold will be traded between $1750-1800 before the employment report and salary growth data are released. These data are the key variables that influence the central bank's decision-making.
At present, the focus is shifting to GMT+8 20 o’clock in the New Deal to be announced by the Bank of England, and the market is expected to raise interest rates. The United States will release the October non-agricultural employment report on Friday.
At GMT+8 16:43, spot gold rose by 0.37% to US$1776.38 per ounce; the main COMEX gold contract rose by 0.76% to US$1777.4 per ounce; the US dollar index rose by 0.35% to 94.190.
The Fed said overnight that it would reduce its monthly asset purchases by US$120 billion at a rate of US$15 billion per month, and plans to completely end its bond purchase program in mid-2022. The decision is in line with market expectations.
The Fed's decision-makers judged that it may be appropriate to reduce net asset purchases on a similar scale each month, but if the economic outlook changes, it will be ready to adjust the pace of purchases. Chairman Powell said that if the economy continues to develop as expected, the Fed may complete the reduction action before the middle of next year. He emphasized that officials can flexibly speed up or slow down the pace of reduction in accordance with economic conditions.
But Powell hinted at the press conference that he would remain patient before raising interest rates and wait for further employment growth. However, Powell admits that inflation is disturbingly high, and he blames it on the “turbulence” of the global supply chain, which may continue into the second half of next year, and it will also bring to the fixed-income or lower-income households. Come to challenge.
Powell said that for now, the Fed will remain "patient" when deciding when to raise interest rates. "We don't think it is time to raise interest rates. To achieve full employment, some progress needs to be made." This is intensifying with the financial market. The bet is the opposite. The market predicts that inflation will prompt the Fed to end its support for the economy during the pandemic earlier.
In fact, in recent weeks, investors have paid more attention to the Fed’s response to the sharp rise in prices than the downsizing of bonds. In the past five months, inflation has been at twice the Fed’s target. The price surge is expected to last much longer than the Fed expected in the spring of this year.
Powell admits that there is uncertainty, but this is only part of the reason why the Fed should not raise interest rates hastily. The inflation trend is likely to satisfy the Fed's interest rate hike threshold, but it may still fall on its own. First, we must achieve full employment, so that workers have more time to return to employment.
Joseph LaVorgna, Chief Economist of the United States at Natixis, said: "They are hedging bets, but this is nothing new, because they have publicly stated that their confidence that inflation will fall back as quickly as they imagined has fallen."
Stephen Innes, managing partner of SPI Asset Management, said that the Fed’s views will benefit the price of gold. Until the Fed decides to raise interest rates, the price of gold will continue to rise. For some signs of the United States, such as wage growth, the Fed will not spend too much time to accelerate the reduction of debt purchases."
Michael Langford, director of the corporate advisory company AirGuide, predicts that the price of gold will be traded between $1750-1800 before the employment report and salary growth data are released. These data are the key variables that influence the central bank's decision-making.
At present, the focus is shifting to GMT+8 20 o’clock in the New Deal to be announced by the Bank of England, and the market is expected to raise interest rates. The United States will release the October non-agricultural employment report on Friday.
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