Since late July, gold prices have risen for three consecutive weeks, returning to near the integer mark of 1,800 US dollars per ounce, recovering half of the decline from mid-June to mid-July.

htmlSince late July, the price of gold has risen for three consecutive weeks, returning to near the integer mark of 1,800 US dollars per ounce, recovering half of the decline from mid-June to mid-July. The U.S. dollar index has fallen from its historical high above 109, and the 10-year U.S. bond yield has fallen from above 3%, both of which are important factors supporting the short-term rebound in gold prices.

International gold price daily K-line chart trend

Today’s intraday international gold price rebounded to below 1,800 US dollars per ounce

Article | COFCO Qidefeng Zhang Yingying

This article is an original article by China Gold Network. The content is for reference only and does not constitute operational advice. or investment guide.

The Federal Reserve decided to raise interest rates by 375 basis points at its high-profile interest rate meeting at the end of July, raising the federal funds rate to a range of 2.25-2.5%, which was in line with the market's mainstream expectations, but was higher than what the market had expected earlier. A possible rate hike of 100 basis points may be slightly mild. The Federal Reserve stated in its post-meeting statement that U.S. economic growth is slowing down (in fact, the U.S. GDP has experienced negative growth for two consecutive quarters, and the U.S. economy has entered a technical recession). However, based on the experience of the 1970s to 1980s, the Fed still tends to pay the price of economic recession. in exchange for price stability. After the Federal Reserve raised interest rates this time, gold and silver prices rebounded to varying degrees due to the negative effects. Based on this, the phase in which the Federal Reserve's rapid and substantial interest rate hikes have had the greatest impact on gold prices may be coming to an end or over.

U.S. interest rate futures market data as of August 4 show that the market expects that the probability of the Federal Reserve raising interest rates by 25 basis points at the September interest rate meeting is about 60%. A few weeks ago, everyone generally expected the Federal Reserve to raise interest rates by 25 basis points in September. The Federal Reserve will raise interest rates by at least 50 basis points at the meeting. Therefore, compared with a few weeks ago, the Fed rate hike speed and magnitude expected by the market are more moderate. This has also caused the U.S. dollar index and U.S. bond yields to rise from highs. The main reason for the decline.

Market expectations for the Federal Reserve to raise interest rates

As of August 4, the U.S. interest rate futures market expects that the Federal Reserve will raise interest rates by 0.25% in September with a high probability

Data source: Chicago Mercantile Exchange

U.S. second quarter Gross domestic product Continued weakness in (GDP) data is not enough for the Fed to stop raising interest rates, which will further confirm the downward trend of the U.S. economy. The expectation of a long-term economic recession has potential support for gold prices, because gold has performed well in every economic recession cycle over the past 40 years. However, rising interest rates and tighter liquidity in the near-term are still the "near-term challenges" faced by gold prices. worry". For the rest of this year, gold prices are likely to maintain oscillations under the resonance of such negative and bullish factors. Once the market's trading logic shifts from the Fed's tightening of monetary policy to economic recession, gold prices are likely to exit the next round of rising prices. .

Investors need to pay close attention to inflation data. If the US inflation data reaches a new high in July, the market interpretation may still be "the Federal Reserve will speed up interest rate hikes" rather than "buy gold to fight inflation." At that time, the feedback from the interest rate futures and gold markets The interest rate hike path may become steeper again. On the other hand, if the downward turning point of U.S. inflation is confirmed, the market's interpretation may be that the Federal Reserve's interest rate hikes may maintain the current expected path, and gold prices may not experience the same deep adjustment as in June and July. As for employment data and economic data, their influence may be weaker than inflation data at this stage.

(The above content does not constitute investment advice or operation guide, please enter the market at your own risk)