On Tuesday (August 22), international gold prices rebounded for the second consecutive trading day. Although the yield on U.S. Treasury bonds rose to a near 16-year high of 4.365, as investors looked forward to the upcoming global central bank annual meeting later this week. New clues, so gold, a non-interest-bearing asset, is holding its ground for the time being.
At 15:12 Beijing time, spot gold rose 0.25% to $1,899.29 an ounce; the main COMEX gold futures contract rose 0.26% to $1,928.0 an ounce; the U.S. dollar index fell 0.24% to 103.091.
"Potential buyers have been waiting to see how far gold will fall and this could be the beginning of their re-entry," said Clifford Bennett, chief economist at ACY Securities. strong rebound.
But the resilience of the U.S. economy has strengthened the view that the Fed will keep interest rates higher for longer. The world's largest gold exchange-traded fund (ETF), SPDR Gold Trust, resumed outflows on Monday (August 21). Fears of a U.S. economic slowdown have receded this year, gradually sapping the appeal of gold ETFs.
Regarding the outlook for interest rates, Federal Reserve Chairman Powell's comments at the annual meeting of global central banks in Jackson Hole, Wyoming, on Friday (August 25) have attracted attention. Bennett added that Powell is likely to emphasize that the Fed has done a good job of bringing headline inflation down to its target range ... which may be enough to take some of the selling pressure off the gold market.
Markets expect the Fed to pause its rate-hike cycle in September, but some see a 25-basis-point increase in rates by the end of the year. U.S. consumer prices (CPI) and producer prices (PPI) showed that the battle to bring inflation back to the Fed's 2% target was far from won, raising market bets on it.
At the same time, hawkish Fed expectations still support the rise in U.S. bond yields and continue to support the dollar. That said, the generally weak risk tone is likely to continue to provide some support for the safe-haven gold price.
The fundamental background of gold is unclear, and the price of gold faces the risk of key events. Investors need to be cautious before making aggressive directional bets. During the day, traders will look to U.S. economic data for cues, including existing home sales and the Richmond manufacturing index due later in the North American morning session. Beyond that, a series of influential Fed officials' speeches will play a key role in driving demand for the dollar and provide some impetus to gold prices.
According to Ulrich Leuchtmann, head of foreign exchange and commodity research at Commerzbank, gold is not bad at all compared to the G10 average (excluding the US dollar and the euro). This only seems to be because the dollar, euro, and to some extent also rose relative to this average during this period. And, almost all eyes are on gold priced in dollars or euros. There are many dollar-denominated asset prices that move when the dollar moves wildly without anything special happening to them. At times like this, many analysts always fall into the same trap: they confuse the strength or weakness of the dollar with the weakness or strength of the asset they are analyzing.
