The basic outlook for gold: continue to pay attention to the performance of the US economy
On Monday (April 17), as the U.S. dollar and U.S. bond yields continued to rise, gold prices fell further.The U.S. dollar closed up 0.51% yesterday, and the 10-year and 2-year yields on U.S. bonds rose 8 and 9 basis points, respectively.
Part of the reason for the rebound of the dollar may be a technical pullback. At the same time, the US New York Fed manufacturing index for April released last night was unexpectedly better than expected and the NAHB real estate market index improved for four consecutive months. It also provided additional support for the dollar.
Up to now, combined with the recently released economic data, the US labor market is still resilient, and core inflation continues to remain high and volatile, which has led the market to revise its expectations for the Federal Reserve to raise interest rates in May.
According to the observation of the CME Federal Reserve, it is expected that the probability of the Fed's May interest rate decision to raise interest rates by 25 basis points to 5.00%-5.25% is 87.1%, and the probability of no interest rate is 12.9%.
As of June, the probability of a cumulative interest rate hike of 25 basis points to 5.00%-5.25% is 66.7%, and the probability of a cumulative interest rate hike of 50 basis points to 5.25%-5.50% is 22.1%. The currency market still expects that the Fed will raise interest rates for the last time in May.
In general, although the market's recent expectations of the Fed's interest rate hike have strengthened, the rebound in the dollar and U.S. bond yields may only be short-lived as the Fed's tightening cycle approaches the end and the U.S. economy faces the prospect of recession.
Finally, the U.S. Markit manufacturing and service industry PMI for April, which will be released this Friday (April 21), is worth paying attention to, and then the initial value of the U.S. GDP for the first quarter next Thursday (April 27).
If more economic data further confirm the slowdown in US economic activity, the gold market is still expected to strengthen again in the future, but before that, gold prices will face phased adjustments in the short term.
On the technical side, you can compare the trend chart to see it more clearly.
On Monday (April 17), as the U.S. dollar and U.S. bond yields continued to rise, gold prices fell further.The U.S. dollar closed up 0.51% yesterday, and the 10-year and 2-year yields on U.S. bonds rose 8 and 9 basis points, respectively.
Part of the reason for the rebound of the dollar may be a technical pullback. At the same time, the US New York Fed manufacturing index for April released last night was unexpectedly better than expected and the NAHB real estate market index improved for four consecutive months. It also provided additional support for the dollar.
Up to now, combined with the recently released economic data, the US labor market is still resilient, and core inflation continues to remain high and volatile, which has led the market to revise its expectations for the Federal Reserve to raise interest rates in May.
According to the observation of the CME Federal Reserve, it is expected that the probability of the Fed's May interest rate decision to raise interest rates by 25 basis points to 5.00%-5.25% is 87.1%, and the probability of no interest rate is 12.9%.
As of June, the probability of a cumulative interest rate hike of 25 basis points to 5.00%-5.25% is 66.7%, and the probability of a cumulative interest rate hike of 50 basis points to 5.25%-5.50% is 22.1%. The currency market still expects that the Fed will raise interest rates for the last time in May.
In general, although the market's recent expectations of the Fed's interest rate hike have strengthened, the rebound in the dollar and U.S. bond yields may only be short-lived as the Fed's tightening cycle approaches the end and the U.S. economy faces the prospect of recession.
Finally, the U.S. Markit manufacturing and service industry PMI for April, which will be released this Friday (April 21), is worth paying attention to, and then the initial value of the U.S. GDP for the first quarter next Thursday (April 27).
If more economic data further confirm the slowdown in US economic activity, the gold market is still expected to strengthen again in the future, but before that, gold prices will face phased adjustments in the short term.
On the technical side, you can compare the trend chart to see it more clearly.
