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Gold rebounds, US index hits a one-week low: MT4.MT5 build related news
发布时间：2022-08-25 浏览：120
On Monday (July 18), spot gold rebounded, and the U.S. dollar index hit a new one-week low of 107.18, further deviating from the nearly 20-year high of 109.303 set last week. Several Fed officials signaled last week that they disapprove of a faster pace of rate hikes this month. The Fed has entered a period of silence ahead of its policy meeting this month. If it is finally proved that the Fed's words are wrong, it will be interpreted by the outside world as a medical emergency and damage the credibility of the Fed.
At 20:23 Beijing time, spot gold rose 0.46% to US$1,714.29 per ounce; the main COMEX gold futures contract rose 0.52% to US$1,712.4 per ounce; the US dollar index fell 0.36% to 107.606.
Expectations for a rate hike at the Fed's July meeting fell back to 75 basis points, not the 100 basis points some had forecast after June's spike in inflation data. The CME's "FedWatch" tool recently showed that the probability of the Fed raising interest rates by 100 basis points this month fell to 30% from 80% in the middle of last week.
Until the beginning of last week, the traditional view was that the Fed would raise interest rates by 75 basis points in July, and after confirming that the CPI surged by 9.1% year-on-year in June, speculation about a higher-than-expected rate hike began to permeate the market. U.S. inflation is at its hottest since 1981 as fuel, food, housing and commodity prices surge. The war in Ukraine has raised energy prices and exacerbated disruptions to global supply chains.
U.S. long-term inflation expectations fall
However, the initial value of the 5-10-year inflation rate expected by the University of Michigan in the United States in July was 2.8%, which was not only far lower than the 3.1% in June, but also hit a new low in a year. The value also continued to fall by 0.1 percentage points to 5.2%.
Jay Bryson, chief economist at Wells Fargo, also called on the Fed to accelerate rate hikes following the release of the U.S. CPI report for June. But after seeing the July data from the University of Michigan, he said the case for doing so has become less compelling.
“75 basis points is a huge amount, don’t think about raising rates too much,” Waller said at a conference in Victor, Idaho, last week. Inflation data for June was worse than we thought, but it's critical that we don't set policy on a single data."
"A more abrupt change in interest rates could stress the economy or financial markets, which would undermine the Fed's ability to communicate a higher rate path to the market," Kansas City Fed President George said last week.
At the same time, other major central banks around the world are increasing the pace of interest rate hikes. The Bank of Canada beat expectations last week to raise interest rates by 100 basis points, New Zealand's inflation data released on Monday hit a 30-year high, and the Reserve Bank of New Zealand raised expectations for a 75 basis point rate hike in August.
Stephen Innes, managing partner at SPI Asset Management, said: "...gold closed last week holding support at $1,700 an ounce and we may see a short squeeze as hawks may be disappointed that the Fed will only raise rates by 75 basis points this month. ."
The Fed also needs to maintain its own credibility
A Wall Street Journal survey this month put a 49 percent chance of a recession in the U.S. economy within the next 12 months. About 46% of economists expect the Fed to raise interest rates excessively and cause unnecessary economic weakness; 12.3% of economists believe the Fed will not raise interest rates enough; 42% of economists say the Fed will raise interest rates moderately , to balance inflation and growth.
Speculators remain bearish on most non-dollar currencies. The latest U.S. Commodity Futures Trading Commission data showed total dollar long positions at a seven-week high, while euro and yen shorts rose by $1 billion and $470 million, respectively.
The U.S. isn’t technically in a recession yet, but more economists are making such predictions, and business leaders are starting to prepare for it. All of this fuels Americans' unease about their jobs and their finances. A recent survey by Insight Global concluded that while the U.S. unemployment rate now stands at just 3.6 percent, it is almost the lowest level since the 1970s. But nearly 80 percent of U.S. workers fear they won't be able to keep their jobs if a recession hits.
Fed officials have entered a period of silence before the July meeting, and even if the policy-making attitude changes again, there is no time to communicate with the outside world, so it is unlikely to shock the market again to avoid market turmoil. If the Fed really expands the rate hike this month, it will only make American households and investors think that the Fed is in a hurry, that the pace of policy changes lags far behind inflation changes, and that repeated changes in decision-making will also damage the Fed’s credibility, making the Fed’s reputation worse. Accelerates running out of ammunition to fight inflation.
Derek Halpenny, head of financial research at MUFG, said: “With equity markets back on a bullish note and risk appetite picking up, comments from Fed officials on the outlook for rate hikes have had an expected impact. And more synchronized policy dynamics around the world will help To keep the dollar from strengthening.” However, he does not expect the dollar to weaken until the end of the third quarter.
Spot gold at $1735
From the daily chart, the price of gold has started a downward ((v)) wave trend since $1879, and the 100% target is $1667 in the market outlook. Wave ((v)) is a sub-wave of the descending wave C that started at $2,070. Wave C belongs to the correction (IV) wave that started from $2075.
On the hourly chart, the price of gold may start a rebound (iv) wave trend from $1,697, with the upper target looking at the 23.6% Fibonacci retracement level of wave (iii) at $1,735. Waves (iii) and (iv) are both sub-waves of ((v)).