The U.S. Department of Labor released the latest August Consumer Price Index (CPI) seasonally adjusted annual rate index. With a market forecast of 8.1, the CPI index recorded 8.3%, lower than the previous index announced 8.5%. After the data was released, the index of rose rapidly, non-US currencies, US stocks, and crude oil fell, and international gold prices plummeted sharply, reaching a low of 1,696.2 per ounce intraday.
International gold price fluctuates downward
article | Independent analyst Zhao Zhongyan
This article is an original article from China Gold Network. The content is for reference only and does not constitute operational suggestions or investment guides.
1 Why did gold prices fall sharply after the CPI data was released? The
CPI index reflects the prices of retail goods in the United States and is the most intuitive data that reflects the inflation level. The decline of the CPI index indicates that the US inflation level has temporarily been relieved for a limited time recently, and American consumers have also expressed optimism about this. However, since the US inflation level is too serious, and according to the data statistics on the US Economic Beige Book last week, the United States will face the potential risk of economic recession next year, so the situation at this stage is actually not optimistic.
was affected by the CPI data, and the US dollar index experienced a sharp rise. After the US dollar index rose to 110, it was under pressure and lowered, reaching a high of 110.07 last night. This wave of sharp rise in the US dollar index not only puts huge pressure on non-US currencies, but also all of which fell under pressure. The anti-correlation between commodities was well reflected.
2 Market attention next week Fed 9 interest rate meeting
8 US CPI data has increased the market's expectations that the Fed's September interest rate meeting will continue to raise 75 basis points. The US dollar index may have greater room for upward, and it will further increase the attractiveness of international capital return. The return will once again generate a driving force on the US dollar index, which will bring more pressure to the gold price. If gold prices can still stand firm at more than $1,680/ounce under such pressure, then this may be a better buying point, but it must be noted that this theoretical buying point still has huge risk exposure compared to the actual situation in the United States at this stage.
Because the highest level of inflation in 40 years is ahead, in order to curb the out-of-control economic situation, the Federal Reserve has made the market situation unprecedentedly complicated. Next Thursday (September 22) the Federal Reserve FOMC will announce the latest interest rate resolution, policy statement and economic expectations, and Federal Reserve Chairman Powell will also hold a monetary policy press conference. In addition, the US Treasury market is not optimistic, and as some big buyers in the international market have begun to reduce their holdings on a large scale, this interest rate decision has attracted much attention from all parties.
The author believes that under this situation, the Federal Reserve expects to solve the inflation problem through a large rate hike, and the complex international situation has also become a huge obstacle. Europe's energy supply issues, geopolitical situation issues, and even food issues may have an impact on global inflation, and the United States cannot be immune to it.
USD index has risen significantly in the short term due to interest rate hikes, but in contrast, the US stock market and bond market seem to be weak in responding to economic changes. Suppressing inflation can be alleviated by raising interest rates, but getting rid of the shadow of the recession requires the boost of the real economy, which undoubtedly takes more time to achieve. Such a high deficit and the outside world's disapproval of US Treasury bonds all need to be resolved slowly by the US government.
3 Although the pressure is great, gold is still worth considering
's surge in the US dollar index is currently under huge pressure on gold prices. In the long run, gold prices are not lacking in support from fundamentals. Although it may not be that far away after breaking $1,680 per ounce, the emergence of lower prices actually provides a better buying point. In the long run, gold is a variety worth considering first. When the world is not optimistic about the status of the United States' international currency, some countries have begun to explore the situation of getting rid of US dollar settlement to conduct international trade . The methods of preserving assets have undergone new changes, and there are no more and better investment products that can replace gold.
international gold price has once again reached around $1,700/ounce. In the range of $1,680/ounce-1,700/ounce, the trend of gold price has become more complicated. In the face of strong support in this range, the risk exposure in any investment direction has become larger. Before the Federal Reserve determines the specific interest rate hike on September 22, the possibility of a big breakthrough or a turning point in the market is not very large. The pressure levels above the $1720/ounce and $1730/ounce are supported at the bottom, and the support levels between $1680/ounce and $1700 are below. The specific changes should appear after the interest rate meeting next week. It is recommended to leave the market and wait and see and wait for the direction to be determined before making plans.
(The above content does not constitute investment advice or operating guide. Entering the market accordingly is at your own risk)
