At this policy meeting, Federal Reserve policymakers reiterated their intention to continue to raise interest rates, believing that to curb high inflation, they must change monetary policy to a restrictive level that slows the economy and maintain this level until inflation accelerates and declines significantly. . The minutes of the meeting mentioned that given the changing nature of the economic environment and the lag in the impact of monetary policy on the economy, there is also the risk of the Fed over-tightening monetary policy. This is the first time the Fed has mentioned the risk of "excessive tightening" this year.
The Federal Reserve also continues to emphasize that it will decide the rate of interest rate hikes based on data. Before the next interest rate meeting in mid-September, the market can at least see the CPI and employment data in August. In addition, investors can also hear fresher guidance from policymakers at the Federal Reserve's annual meeting in Jackson Hole next week.
In addition, U.S. retail sales, known as "horror data", remained unchanged month-on-month, significantly lower than expected and previous values. Specific data shows that U.S. retail sales in July were the same as in June, hitting a new low in the past two months. Not only was it lower than the previous market expectation of a 0.1% increase, but it was also significantly lower than the 1% increase in June. On a year-on-year basis, retail sales increased by 10.3% in July.
Due to the hawkish speeches of many Federal Reserves, the U.S. dollar hit a new high in the past month, and the strong U.S. dollar put pressure on precious metals , causing gold to fall for five consecutive days this week, the longest decline since November last year. Gold prices have fallen by more than $55 this week. Now, the market's attention turns to the central bank's annual policy meeting in Jackson Hole next Friday.
html On Friday, the price of gold closed at 1,746.88 US dollars per ounce in late trading on the US market, down 11.42 US dollars or 0.65% during the day. The highest intraday hit was 1,759.08 US dollars per ounce and the lowest was 1,745.33 US dollars per ounce, which was the lowest level since July 28.
Although Fed policymakers disagree on the size of the next rate hike, they agree on the need to continue raising rates. St. Louis Fed President Bullard urged the Fed to raise interest rates by 75 basis points, while Kansas City Fed President George sounded a more cautious tone. Richmond Fed President Barkin expressed the same resolve on Friday, noting that the moves could lead to a recession.
Jim Wyckoff, senior analyst at Kitco Metals, said, "The main factor putting pressure on the gold and silver markets is the recovery of the U.S. dollar... Gold and the U.S. dollar compete as safe-haven tools, and rising U.S. interest rates imply a stronger U.S. dollar, which will further suppress gold. "
Chintan Karnani, research director at Insignia Consultants, said that if spot gold prices fall below $1,750, gold prices may fall further next Monday. He said that physical gold demand in Asia must "increase significantly next week for gold prices to reverse and retest the $1,800 mark." "Demand will only rise when people think gold prices are more or less close to the bottom."
Reprint source: China Gold Network, CICC Online
Picture source: The picture comes from the Internet, infringement and deletion
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