2024-01-17 03:24:00
Gold market analysis: Fed Governor Waller hawks gold, down $30
Gold prices fell more than 1% on Tuesday (January 16) to US$2,027.26 per ounce, down US$30 throughout the day. Gold’s decline on the day was mainly affected by Federal Reserve Governor Waller’s hawkish remarks on cutting interest rates this year, the dollar strengthened and U.S. Treasury yields rose.
Federal Reserve Governor Waller said on Tuesday that the United States is “very close” to the Fed’s 2% inflation target, but that the Fed should not rush to cut interest rates until it becomes clear that lower inflation will continue. Waller said that whenever a rate cut begins, it should be done “methodically and carefully” rather than the kind of big, rapid cuts the Fed uses when trying to save the economy from a shock or impending recession. “The key is that the economy is doing well. That gives us the flexibility to move cautiously and methodically. We can see how the data goes and see if the progress is sustained.” Waller’s speech coincided with market expectations for the Fed’s March meeting It went against expectations that it would start cutting interest rates and lower the benchmark policy rate by 1.5 percentage points before the end of the year. After his speech, traders reduced bets that the Fed would cut policy rates in March. The central meaning of Waller’s speech actually represents the mainstream trend of the Fed, which is that before supporting an interest rate cut, more information needs to be obtained in the next few months to confirm that inflation is falling sustainably towards the Fed’s inflation target. View. The Fed remains on the sidelines and is trying to reduce market expectations that the Fed will cut interest rates in March. To this end, the U.S. 10-year Treasury bond yield surged above 4% on Tuesday. Investors are also weighing the possibility that the Federal Reserve will soon cut interest rates significantly. This week is packed with data that could influence decisions by major central banks. Despite the market’s aggressive stance, most analysts remain cautious. With multiple Fed officials speaking this week, any signs of delaying or scaling back interest rate cuts could impact gold. Taking into account the current economic indicators and the central bank’s stance, the central bank may overturn the market’s expectations of a sharp interest rate cut. In the short term, gold prices may still be under certain downward pressure.
On a technical level, looking at the 4-hour chart, gold continues to fluctuate downward as a whole, with prices continuing to fluctuate and retrace below the Bollinger Band, and the moving averages are also under pressure to move downwards. Gold is facing downward pressure to adjust in the short term. The top short-term focus is on the first-line resistance of 2045-2048, and the bottom short-term focus is on the first-line support of 2025-2020.
Wang Gang, Bank of China Guangdong Branch
These are my personal views only and do not represent the views of my institution.
Screenshot provided by Yihuitong
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