What does the sudden fall of gold mean ([gold closing] three consecutive rises suddenly stop! Gold s

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24K99 News Gold prices rose continuously in the first three days of this trading week, breaking the bearish trend that dominated the trend of gold prices for most of February Thursday (March 2). With the yield of US treasury bond bonds strengthening and supporting the dollar, this recent rise was called off. Gold traders are currently waiting for more clues from the Federal Reserve, which may come from the speech of Federal Reserve officials and the ISM service industry PMI on Friday.

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At the same time, investors are paying attention to the yield of US treasury bond bonds. Taking the benchmark 10-year treasury bond as an example, the yield has rebounded above the resistance level of 4%, close to the highest level since October last year. As the gold price is negatively correlated with the yield of US treasury bond bonds, this may bring further downward pressure on gold. In the late US market, spot gold closed at 1835.65 US dollars/ounce, down 0.91 US dollars or 0.05%, The day's maximum hit $1839.01/ounce, and the minimum hit $1829.96/ounce.

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(Spot gold daily chart, source: FX168) COMEX gold futures in April fell by US $4.90, or 0.3%, to close at US $1840.50/ounce, after rising for three consecutive trading days on Wednesday. According to FactSet data, the gold price in February fell by 5.6% month-on-month, the largest monthly decline of the most active contract since June 2021.

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While spot gold fell, other precious metals rose and fell in different directions: spot silver closed down 0.45% to close at $20.883/ounce; Spot platinum rose 0.54% to US $962.80/ounce; Spot palladium closed up 0.51% to 1446.28 US dollars/ounce. According to the data released in the day, the number of people applying for unemployment benefits at the beginning of the week from February 24 in the United States recorded 190000, lower than the expected 195000, and the previous value was 192000.

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In fact, since the beginning of January this year, the number of people applying for unemployment benefits for the first time has been less than 200000. While seeking to control inflation, the Federal Reserve is looking for signs of the cooling of the labor market, which also indicates that it may not like the signal sent by the data of initial unemployment benefits. Looking ahead, it is expected that the number of layoffs in American enterprises will increase, and the unemployment rate is expected to rise to 4.5% by the end of 2023.

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The number of initial applicants in the United States fell again last week, indicating that the labor market continued to strengthen, which may prompt the Federal Reserve to continue to raise interest rates. The latest data shows that there is still no sign that large-scale layoffs (mainly in the technology industry) have had a substantial impact on the labor market. In terms of the Federal Reserve, Boston Fed Chairman Collins said that policymakers need to continue to raise interest rates to control inflation, However, how much borrowing costs need to rise depends on future data.

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Collins said in an interview with the Vermont Public Radio: "I really think we need to raise interest rates further, and the correct rate increase actually depends on a comprehensive review of the information we receive." The interview was recorded on Wednesday and shared by the media on Thursday.

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”The Chairman of the Federal Reserve of Atlanta, Bostock, subsequently said that he "firmly" supported the interest rate increase of 25 basis points. The Federal Reserve may suspend the interest rate increase in the middle and late summer. Bostock said on Thursday that he firmly stood in the camp of supporting the interest rate increase of 25 basis points, and said that the central bank was prudent. Bostock said at the roundtable meeting with reporters on Thursday, "At present, I still firmly stand in the camp of interest rate increase of 25 basis points.

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”Bostock said, "I do think we are in a cautious period now," partly because the delayed impact of the Federal Reserve's rapid interest rate increase last year may soon impact the economy. He added: "There are reasonable reasons to show that we will see some more robust slowdown." In the US market, the US dollar index continued to rise and hit a daily high of 105.18, ending at 104.98; Spot gold fell under pressure and fluctuated back and forth in a narrow range.

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Earlier this week, the weak data released by the United States, led by the decline of inflation expectations in the consumer confidence report released on Tuesday, triggered some profit-taking against the dollar bulls, because the data may alleviate the pressure of the Federal Reserve to raise interest rates again. Earlier Wednesday, China's purchasing managers' index (PMI) was higher than expected, improving market sentiment in Asia.

The American Association for Supply Management (ISM) released a manufacturing PMI report on Wednesday, with mixed results. Although the overall data was slightly disappointing (47.7, expected to be 48), it was still in the contraction range. The employment sub-index also fell below 50 (49.1, expected to be 51), but the ISM manufacturing payment price index jumped from 44.5 to 51.3, far higher than the consensus expectation of 45.

The latter figure shows how enterprises determine inflation expectations, which is still the most concerned issue of Federal Reserve officials. After the release of the data, the price of gold has declined, but it still keeps rising. The American Association for Supply Management will release the PMI data of the service industry on Friday. If this report reiterates that the rising cost of labor is exacerbating the price pressure of the industry, the dollar may maintain its rise and put pressure on gold.

Therefore, market participants will pay close attention to the components of the payment price index. However, it is worth noting that the Fed Watch Tool of the Chicago Mercantile Exchange Group shows that the market has fully digested the expectation that the Fed will raise interest rates at least twice in March and May by 25 basis points.

In addition, the probability that the Federal Reserve will maintain the policy interest rate unchanged in June is 25%. The market's turn has confirmed that the US dollar has not much room to go up, at least until the employment report and inflation data in February confirm or refute the interest rate increase of another 25 basis points in June. Gold sellers still have hope. Anil Panchal, editor of FXStreet News, pointed out that from a technical point of view, Gold still tends to go down: "The gold price is still in a downturn after rebounding from the three-week resistance level of about 1844-48 dollars.

This callback trend also coincides with the fall of RSI (14) from the overbought region and the bearish MACD signal, which keeps gold sellers hopeful. "However, as of the time of press release, the convergence of the 200 and 50 simple moving average (SMA) near $1827 seems to be the key support to challenge the further decline of metals.

Even if the price falls below the convergence line of the moving average of US $1827, which started at the level near the resistance line of US $1817 on February 9, it can also serve as the last line of defense for gold buyers. Gold mining development and supply-side dynamics. Even though the impact of demand on gold prices is usually much greater than that of supply, the other side of market dynamics is also worth tracking.

With the continuous expansion of existing mining projects in North America, the production of gold across the Americas may increase in 2023. The decline trend of gold prices in the second half of 2022 can be attributed to the increase of supply. However, in order to keep up with the surge of such activities, mining companies have to cope with soaring inflation, which increases the cost of global mining business, which is a factor supporting the gold price.

As central banks continue to tighten monetary policy to combat inflation, the prediction of the deflation process in 2023 should have a special bearish impact on the gold price. The extent of this impact may be limited, or at least it is secondary to the speculative interest force on the demand side

The financial market in early 2023 was a double story. Due to the optimism of the market about the slowdown in inflation and the continued dove talk of the Federal Reserve, gold showed an upward trend throughout January. However, after the release of the US Non-Farm Employment Report (NFP), gold sharply reversed in February and returned to the old dynamic. The US economy increased more than 500000 jobs in January, which changed the market's expectation of the Federal Reserve to loosen monetary policy, The dollar regained its position as the king of the market.

This year, the gold price opened at $1823.76, and reached the intra-year high of $1960 on February 2. At that time, between the first meeting of the Federal Reserve this year and the release of the US employment report in January, the gold price fell sharply and fell to the intra-year low of slightly higher than $1800, and found support here.

(Source: FXStreet) Outlook 1. Jim Wyckoff, a senior analyst at Kitco, wrote that gold and silver prices fell in the early morning of the US market on Thursday. External market factors were not conducive to bullies in the metal market because of the rise in the yield of US treasury bond bonds and the appreciation of the US dollar. 2. Giovanni Staunovo, an analyst at UBS, said that "gold prices and other precious metals still face the challenge of further interest rate hikes in the near future.

”"The focus of market participants is still on the US economic data and how it affects the monetary policy of the Federal Reserve" 3. Stephen Innes, executive partner of SPI Asset Management, said: "Gold is in trouble under the dollar-driven mechanism, but there are still buyers who buy on the bargain to hedge the re-inflation of geopolitical risk premium.

”4. Brien Lundin, editor of Gold Newsletter, pointed out that the statement about the consensus of investors "from the imminent end of interest rate increase to a higher level for a longer period of time" made the price of gold and silver fall sharply. However, the price of gold rose for three consecutive trading days, while the price of silver rose continuously on Wednesday.

He wrote in his February newsletter that the recent rise was "encouraging - this is a sign that the very pessimistic sentiment in February may be weakening, at least for gold." He believed that "public opinion is too inclined to think that (the Federal Reserve) will continue to raise interest rates this summer." He said that there are still three factors that may force the Federal Reserve to "abruptly stop raising interest rates in the next week".

These are the "collapse" of the stock or bond market, the upcoming recession and the soaring cost of the federal debt caused by higher interest rates, Lundin said. "His initial view at the beginning of this year was that the Federal Reserve sought the opportunity to suspend the interest rate increase for the first time and let the lag effect play its role, but it may eventually be delayed for a month or two, but certainly not until the middle of the year.

”He believes that the recent inflation report "supports my view that the Federal Reserve will have to suspend and eventually turn, and inflation has not yet reached the target of 2%" Lundin said. In this case, "the Federal Reserve is more dovey, but inflation continues, and gold will be more bullish than any other asset class." The focus of the next trading day is

09:45 China's Caixin service industry PMI in February 17:00 The final value of the service industry PMI in February in the euro area 18:00 The monthly rate of PPI in January in the euro area 22:45 The final value of the Markit service industry PMI in February in the United States 23:00 The ISM non-manufacturing industry PMI in February in the United States 24:00 The Federal Reserve Logan delivered an opening speech at an event

At 04:00 the next day, Federal Reserve Governor Bowman delivered a speech. At 05:45 the next day, Federal Reserve Barkin delivered a speech on inflation