precious metals market, gold prices fell again on Friday. Gold closed at US$1,644.39, down 1.14% ( Futures Gold closed at 390.88 yuan in the night trading day, down 0.57%); silver closed at US$19.26, down 1.73% (futures silver closed at 4,523 yuan in the night trading day, down 1.42%). The most active gold futures market in New York's gold futures market closed down 1.04% and closed at $1,648.3.
Crude oil market, WTI crude oil futures closed down 0.79% at 88.38 yuan/barrel; Brent crude oil futures closed down 0.93% at 94.16 yuan/barrel. (The domestic crude oil futures contract closed at 686.0 yuan on the night trading day, down 0.32%).
Basic analysis of precious metals
Analysis of the main influencing factors of the market, the following aspects have a great impact on the price trend of precious metals.
First of all, in terms of data, the actual monthly rate of personal expenditure in the United States in September was 0.6%, higher than the expected value and the previous value 0.4; the actual annual rate of the United States PCE price index in September was 6.2%, lower than the expected value 6.3 and remained flat at the previous value 6.2; the actual annual rate of the United States in September 1 core PCE price index in September was 5.1%, lower than the expected value 5.2 and higher than the previous value 4.9; the final value of the United States in October 1 University of Michigan consumer confidence index was 59.9, higher than the expected value and the previous value 59.8; the overall data preference of the United States has caused a positive impact on the US dollar and negative gold crude oil foreign exchange trend.
Second, Fed may be difficult to slow down rate hike . The current US labor market is performing strongly, the unemployment rate remains at a historical low, and production and consumption are still resilient. We believe that the US economy is resilient. The core contradiction in the United States is still inflation and the main goal of the Federal Reserve. Against the backdrop of no signs of a significant decline in core inflation, we believe that the Fed may find it difficult to slow down interest rate hikes. The US economy has rebounded significantly. The U.S. GDP annualized rate rebounded to 2.6% in the third quarter of 2022, a significant rebound from the second quarter. From a structural perspective, net export is the biggest contribution, and the contribution of net export comes from a significant decline in imports, which may be difficult to sustain. Investment is the biggest drag, especially residential investment, which may be related to the Fed's continued interest rate hike.
Third, global stock markets closed on Friday, US stock three major indexes rose across the board, Dow Jones Index rose 2.59% to 32,861.80 points; Nasdaq Index rose 2.87% to 11,102.45 points; S&P 500 Index rose 2.46% to 3,901.06 points. Most of the large-scale technology stocks rose, Apple rose 7.56%, Google and Microsoft rose more than 4%, and Amazon fell nearly 7% against the market. The rebound trend of US stocks has brought some motivation to the current rebound of gold and silver.
fourth, the US 10-year Treasury bond yield rose from the lowest 0.91% in 2021, and then fell back after reaching a high of 1.77%. The bottoming out in August 2021 was 1.17% and it rose again; it continued to fluctuate and decline yesterday, closing around 4.01% in the morning on October 31. The pullback in US bond yields stimulated the rebound of gold prices.
is fifth. The world's largest gold ETF-SPDR decreased by 2.61 tons on October 28, 2022, and the total holdings decreased to 922.5 tons. Since October, it has maintained 10 reductions and 5 increases in holdings. iShares, the world's largest silver ETF, decreased by 20.05 tons on October 28, 2022, and its total holdings decreased to 15,045.48 tons. The current overall increase in silver ETF holdings is conducive to the rebound trend of gold and silver prices.
is sixth. The market expects that the Federal Reserve and the Bank of England will decide to raise interest rates by 75 basis points respectively at the interest rate meeting this week. But the same rate hike means completely different for the Fed and the Bank of England: For the Fed, four consecutive rate hikes of 75 basis points will bring it to a crossroads: the economic recovery in the late stage of the epidemic is being masked by the negative impact of its austerity policy, and domestic inflation is still at its highest level in 40 years. The Fed will choose between hitting inflation and avoiding recession, and the market expects it to be more likely to choose the latter. For Bank of England , a 75-bp rate hike means the bank will increase borrowing costs with the largest margin since 1989. Obviously, the Bank of England is clearly more inclined to the former between fighting inflation and recession. The Bank of England will focus its firepower to combat the worst inflation in 40 years.
Overall, BRICS Huitong’s recent views are as follows: spot gold prices have fallen again, but the downside space is limited. Although the U.S. GDP resumed growth in the third quarter and the labor market remained strong, the Federal Reserve held a 75 basis point hike for the fourth consecutive rate hike in November. But slowing consumer spending shows weakness in the economic outlook, and the Fed may slow down its rate hike in December. In the short term of the day, gold tried to pull back to the low point and tried to go long at . In the general trend, we continue to judge that the gold and silver operation level will continue to focus on buying on batches and dips.
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