Original title: Who is leading the gold market as the international gold price breaks down from $1,660 to a two-year low?
With the intensive release of economic data, the international gold price fell below the $1,700 mark, hitting a new low in more than two years.
On September 15, spot gold fluctuated downward, and expanded its decline during the U.S. session, falling below 5 levels of $1,700/ounce, $1,690/ounce, $1,680/ounce, $1,670/ounce, and $1,660/ounce in a row, the lowest It reached $1,659.4 an ounce, a new low since April 2020. Domestic gold futures also showed significant diving during the night trading session.
The international gold price fell sharply, and the next day (September 16) the domestic A-share market reacted violently: gold stocks generally fell. Wind data shows that as of the close of the day, Hunan Gold fell by 5.2%, Western Gold fell by 4.53%, Zhongjin Gold, Shandong Gold, and Zijin Mining all fell by more than 3%, Chifeng Gold and Yintai Gold fell by more than 2%. As of press time, the international spot gold has not stopped falling, and it has further dropped to US$1,653.4 per ounce during the session.
The reporter learned from a number of analysts that the fall in the price of gold is related to factors such as the strengthening of the US dollar and the expected increase in the Fed’s sharp interest rate hike.
First, data released by the U.S. Department of Labor on August 13 showed that the U.S. CPI in August grew by 8.3% year-on-year, although it was slower than the previous value of 8.5%, but still higher than expected. The market generally expects the Fed to raise interest rates by 75 basis points in September. , so that gold bulls have scruples.
In addition, in the U.S. market session on September 15, the U.S. announced the U.S. retail sales data for August. As a result, the data slightly exceeded expectations. The initial jobless claims data released at the same time as the retail data was also less than expected, marking the fifth consecutive weekly decline. . “The two data show that the U.S. economy is still resilient despite strong consumption and employment, which once once more reinforces the Fed’s aggressive interest rate hike expectations, and gold and silver immediately fell.” Xia Yingying, a metals analyst at South China Futures, told reporters.
In fact, since the beginning of this year, the international spot gold price has dropped from US$2,070/oz in March to US$400/oz, a cumulative decline of over 20% during this period. For the rest of 2022, industry insiders believe that the Fed’s monetary policy adjustment expectations and U.S. recession fears will dominate the gold market.
Shi Jialiang, the non-ferrous and precious metals group of Founder Mid-term Research Institute, told reporters that since the third quarter of 2022, the Fed’s monetary policy adjustment expectations and rhythm will continue to dominate the trend of gold. Affected by the change in the expectation of the Fed to accelerate interest rate hikes, gold as a whole showed a trend of first weakening, then rebounding and weakening once more, and remained weak as a whole. Next, we need to continue to pay attention to the pace of Fed rate hikes and the expected progress of economic recession.
He believes that following the Fed’s accelerated tightening of monetary policy is gradually clear, the fear of economic recession has intensified, the geopolitical situation has not improved substantially, and the possibility of weakness in commodities is high. In the rest of 2022, gold may be dragged down and weakened in the short term, but the key point is The level support is still valid, and the gold allocation price above the key point still exists. He believes that the main operating range of gold in 2022 is 1675-2075 US dollars / ounce (Shanghai gold 355-425 yuan / gram).
Regarding the gold market outlook, GF Futures believes that the real interest rate and the strong US dollar make investors favor assets such as US dollar and US bonds to hedge the impact of interest rate hikes. Under this circumstance, the precious metal market is difficult to improve. During the period, the news affected the trend in the short term and repeated interest rate hikes. It will fluctuate with the trend of risk assets before and following, and the market outlook needs more guidance from fundamental news.
Guosen Futures also said that the U.S. CPI in August was higher than expected, the month-on-month rebound in core inflation highlighted the stickiness of inflation, and the sub-performance highlighted the current resilience of the service industry. The market has fully factored in the expectation of a 75bp rate hike in September, and another 30% probability is expected to raise interest rates by 100bp. The resilience of the U.S. economy is still prominent, while the economic prosperity of Europe is significantly under pressure. The upward trend of the US dollar index may not be over, and the upward process of real interest rates is not over. The pressure on precious metals still exists. (Reporter Chen Shan）
