On Friday, the spot ** intraday rose by more than 18% at 2075$41 an ounce, approaching the all-time high of 2,075 set on August 7, 2020$47 an ounce, a difference of only 6 cents. Along with this, the yield on two-year US Treasury bonds was **11 basis points at one point, to 457%, the lowest since June.
Although Fed Chairman Jerome Powell reiterated that it was too early to speculate on policy easingBut investors are more focused on his statement that interest rates have "penetrated" into restrictive territory, and coupled with weak ISM manufacturing PMI data in the United States, bond traders still increased their bets on the Fed to cut interest rates next year, believing that the probability of a rate cut as early as March next year is as high as 80%, which is nearly double Thursday's level.
Data on Friday showed that the ISM manufacturing industry in the United States was 46 in November7. It has shrunk for 13 consecutive months, the longest shrinkage cycle in 20 years. Among them, the new orders index has contracted for 15 consecutive months, which is the longest consecutive contraction since 1981-1982.
The latest article of the "New Fed News Agency", which is regarded as the "mouthpiece of the Federal Reserve", said that the Fed's interest rate hikes may be over, but they are still "hard-mouthed", don't expect them to admit in black and white that the interest rate hike cycle is over.
Since the beginning of October, boosted by the expectation of the end of the Fed's interest rate hike cycle and the weakness of the US dollar, institutions, ETFs and **aggressive**, gold prices have hit new multi-month highs in a row, and even leveled at a record high this Friday. The main reasons are as follows:
The outlook for US interest rates is the main driver of gold prices, and lower interest rates are generally positive for ** as it does not generate any interest. While the risk of conflict in the Middle East appears to be contained, uncertainty continues to support gold prices. Central bank purchases are likely to remain strong. According to data released by the World Association, global central bank net purchases of 337 tonnes in the third quarter of 2023 were the third highest quarterly net purchases on record, and in the first three quarters of this year, global central bank gold purchase demand increased by 14% year-on-year to a record 800 tonnes. Among them, China has increased its holdings for 11 consecutive months, becoming the largest buyer, with a cumulative increase of 181 tons in the first nine months, a record high. UBS and other Wall Street institutions expect that the Federal Reserve's interest rate cut and the sharp drop in real interest rates will cause gold prices to hit new highs next. According to UBS, gold tends to be **2% about 3 months after the end of previous rate hike cycles, but **7% in the next 6 months.
Strong buying of financial products associated with bullishness, whether it's ETFs. Over the past week, open interest has continued to increase between $2,000 and $2,500, driven by bullish sentiment.
The financial blog zerohedge commented:
This means that the Fed faces a new "old" problem: a mass exodus from fiat currencies and a shift to safe hard currencies, such as **. This is also the reason why Bitcoin is also **.Wall Street news, welcome **app to see more.If the Fed does cut rates as soon as March next year, and then proceed with more quantitative easing,This will inevitably monetize the soaring US budget deficit and interest payments, and then all assets will hit all-time highs, including Bitcoin, Oil.
At that point, Powell will be completely transformed into former Fed Chairman Arthur Burns, and confidence in the Fed will be shattered as the next more aggressive inflation cycle begins, and the countdown to the end of the dollar as a reserve currency system finally begins.