2023-11-05 16:40:00
Keep an eye on the direction of gold prices. There is a chance of setting a new record of 2,080 dollars/ounce. After the Israel-Hamas war, the price surged to more than $165, while the Fed’s money management continues to create profit-selling pressure. Until there is an expected interest rate cut in May next year. Meanwhile, the overall picture of the People’s Bank of China leading the central bank team is to continuously accumulate gold for reserves. It becomes an incentive for prices to continue to increase.
In this atmosphere, it must be acknowledged that “gold” is considered one of the top assets. that investors are turning to pay more attention to Considering the world situation that is currently facing many risks. especially the war between Israel with Hamas in Palestine It is considered one of the important factors that pushes the price of gold to soar continuously during this period.
At the same time, another factor affecting the price of gold during this period. There is no escaping the results of the US Federal Reserve meeting. (Fed) last time (1 Nov.) where the Fed announced that short-term interest rates would be kept at 5.4%. This is the second time in a row that the Fed has not increased interest rates. But it remains open to the possibility of an interest rate increase next time. If inflation picks up in the next few months
Claims that interest rates will remain high following the US economy expands.
The Fed has confirmed it will keep its benchmark interest rate at 5.4%, the highest level in 22 years, to fight inflation. This year, the Fed raised interest rates only once in May. Ready to provide information on maintaining high interest rates that That’s because the US economy expanded rapidly in the third quarter between July and September. and employment remains strong However, there may be further interest rate increases in the future. If it is considered necessary
At the same time, the Fed sees recent turbulence in the U.S. financial markets pushing interest rates on the 10-year Treasury bond to their highest level in 16 years, causing lending rates across the system to rise. This helps meet the Fed’s goal of reducing the overheating of the economy. Including reducing pressure on inflation.
Send the termination signal once more.
Another interesting point is that “Jerome Powell,” the chairman of the Fed, said that the Fed is close to ending its high interest rate policy. But it was noted that interest rates are rising rapidly. It helps reduce inflation without the need to raise interest rates further. It also emphasizes the continued decrease in wage growth. This helps alleviate inflation in another way as well.
So despite signs of stability in inflation in the latest data, But there is still a tendency for inflation to decrease. That led to the Fed’s announcement not to raise interest rates. Push the US stock market up. Meanwhile, bond yields decreased. Because investors interpreted that The Fed may raise interest rates once more. As a final note Before the interest rate cut happens next year.
Expect US interest rates to start decreasing in May next year.
Investors are predicting that The Fed will hold interest rates steady at its December meeting following releasing lower-than-expected employment numbers. This will be a factor in slowing down the Fed’s interest rate increase. The Fed will then cut interest rates in May 2024, faster than it was originally expected to cut interest rates in June 2024.
In addition, investors expect that the Fed Will continue to hold interest rates at 5.25-5.50% at the monthly meeting. January and March of next year Before cutting interest rates by 0.25% to 5.00-5.25% at the May meeting.
Demand for gold continues to be strong
At the same time, there is a report from the World Gold Council that in the third quarter of the past, gold continued to receive support from gold purchases by central banks that remained at record highs. Make quarterly demand (excluding trading outside the stock exchange) reached 1,147 tons, 8% higher than the 5-year average.
In the past third quarter, gold purchases by various central banks were considered the strongest and It is expected that central bankers’ rush to buy gold will not subside until the end of the year. This will help reflect that total annual gold purchases will be stronger once more this year. Amid the trend of high interest rates and the strengthening of the US dollar.
China and Russia are chasing gold without stopping.
At the same time, what helps confirm that the report of the “World Gold Council” has weight is that News of central banks’ gold accumulation begins with the Reserve Bank of Singapore. It is reported that it is currently the third largest buyer of gold in the world in the first nine months of this year. It is second only to the People’s Bank of China who bought the most. Followed by the Central Bank of Poland.
According to data, during the third quarter, the Reserve Bank of Singapore bought 4 tonnes of gold on the market, bringing the total gold purchases this year to 75 tonnes. As for the People’s Bank of China, (The People’s Bank of China) was the largest buyer of gold in the third quarter at 78 tons, making its gold holdings increase by 181 tons since the beginning of the year, totaling accumulated holdings to 2,192 tons.
The National Bank of Poland continued to purchase gold, increasing by 57 tons, increasing its gold collection this year by 105 tons, while Russia It is considered another nation that has accumulated significantly more gold. Russia’s current gold reserves reached a record high of 2,360 tonnes in September. In the past, it increased by 44 tons or 2%, ranking 5th in the world in terms of gold reserves.
These things show that Various central banks There is continued focus on the benefits that gold can bring to a country’s reserves. Whether it’s diversification, downside risk protection, and liquidity, it’s because of gold. It is considered a safe asset. Helps to diversify the reserves of various central banks. It is responsible for the country’s main currency that may change in value.
Gold has a chance of $2,080.
However, “Peerapong Wiriyanukroh”, Senior Researcher, Ausiris Intelligence Department, Ausiris Company Limited, has assessed the direction of gold prices during November that From the situation of maintaining high interest rates by the Fed and the war between Israel and Hamas. It may cause gold prices to break through $2,010 and may peak once more at $2,080 if signs of war widen. But if the war eases tensions Gold prices may face selling pressure and take large profits. The same has happened with wars between Ukraine – Russia and other countries in the past.
After last October The price of gold continued to increase throughout the month and made a new high, the highest in 5 and a half months, at the level of $2,009 (referenced as of September 27), plus an increase of 8.7% at the level of $2,005 compared to the end of September. .at the level of 1,848 dollars
This was mainly driven by the tense situation in the Middle East. Causing the price to surge to around $165 despite pressure from the strengthening of the US dollar. That was the strongest in 11 months and the 10-year US bond yield rose to the highest in 17 years as investors bought the dollar as a safe-haven currency following the Fed chairman signaled the move to continue raising interest rates. This is because the inflation rate has not decreased as expected. With a target of 2%, it is expected that The Fed may have the opportunity to raise interest rates one more time in the final quarter of this year. and may maintain the policy interest rate at a high level for a longer time.
As for the price of gold in the country, which rose to the highest level in history. The price of gold bars was 96.5%, with the highest selling price being 34,250 baht per baht. The highest selling price for gold jewelry was 34,750 baht per baht, an increase of 3.6% compared to the highest selling price of the previous month.
For factors that affect the price of gold in November. That is, the Fed may change its view of raising interest rates higher. To reduce inflation that has no tendency to decrease, which has a negative effect on the price of gold. Next is the issue of non-agricultural employment numbers in the US (6 Nov.) which will reflect the strength of the labor market. If the labor numbers come out well This may increase the likelihood that the Fed will continue to raise interest rates. But if the outcome is bad, it may increase the likelihood that the Fed may delay raising interest rates at its next meeting. It is considered a positive factor for gold prices.
There is also a report on the Core Consumer Price Index (CPI) that will be announced on Nov. 14, with the latest inflation rate in the United States. For the month of September Still stable at 3.7%, making the current overall inflation figure still far from the Fed’s target of 2%, so it must be monitored to see if the October inflation numbers will change in any direction. It is estimated that it will still move above 3.5%, which is considered a supporting factor for the Fed’s interest rate increase. or maintain interest rates at a high level for a longer period of time This will be a negative factor on the price of gold.
At the end of the month, on November 22, there will be another meeting of the Federal Reserve Monetary Policy Committee (FOMC) where the economic direction will be discussed. Recommend trends in future monetary policy operations. If there is a signal to delay the interest rate increase or stop the interest rate increase, gold will immediately receive positive factors. But if it signals the need for further interest rate increases or maintaining high interest rates for a longer period of time, Gold will immediately receive negative factors from such factors.
In addition, on Nov. 30, keep an eye on the price index of US personal consumption expenditures. This does not include food and energy categories. Monthly Nov. Osiris estimated that Price Index from Consumption Expenditures It should still reflect US inflation which is likely to remain stable at a high level. If it goes as expected, it will increase the chance that the Fed will raise interest rates at least one more time or may maintain interest rates at a high level for longer. It is considered a negative factor for gold prices.
Keep an eye on “Gold”‘s big uptrend.
“Pawan Nawawattanasap”, Chief Executive Officer of YLG Bullion International Company Limited (YLG), said that the announcement of the Fed’s policy interest rate maintenance As a result, the direction of gold prices has begun to gain buying power once more. After earlier, there was strong selling pressure to make a profit. From the news of the unrest between Israel and the Hamas group which has stimulated the price of gold to increase by approximately 8-10% since the day of the conflict.
However, even though the Fed Chairman said that interest rate policy must still be considered in line with the goal of reducing inflation to 2%, this round of the Fed’s interest rate increase cycle has come a long way. And it is nearing the end of the cycle of raising interest rates. It is seen that in the short term, gold may fluctuate from selling to make a profit from prices that are stable at a high level. But in the long term, for 2-3 months, when interest rates enter a downtrend, gold There will be a big increase.
At the same time, although in the short term gold has not received full positive factors from the interest rate issue. But gold remains a safe asset for investment around the world. Most recently, central banks around the world reported gold purchases in the first 9 months of 2023. It was found that central banks around the world purchased up to 800 tons of gold, an increase of 14% from the previous period. same as last year The People’s Bank of China took the lead in buying gold in the first nine months of the year. While various countries Try to hedge once morest inflation by accumulating gold and reducing your reliance on the dollar.
This factor has helped gold prices resist rising US bond yields. and a stronger dollar. YLG views that a rise in bond yields will result in more money flowing into the bond market. And when purchasing power increases, it will put pressure on the bond yield of the instrument to adjust downward. With this direction, it is considered to be adding support to the gold price as well.
For investors who want to invest in gold during this period. short term recommendation Traded within the support range of 1,953-1,971 dollars, resistance level of 2,003-2,021 dollars, while 96.5% of domestic gold bars traded within the support range. 33,300-33,600 baht gold, resistance 34,200-34,500 baht
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