The views of large capital investors and the degree of return may determine the fate of the market ...... the future
With the Federal Reserve already eyeing the long-awaited rate cut, it is facing a major test of investor interest.
Gold prices extended Wednesday's rally on Thursday after Federal Reserve policymakers said they expect a 75 basis point rate cut next year. Cooling inflation has prompted investors to prepare for the Federal Reserve's easing policy, with gold prices surging to record highs at one point last week.
With interest rate cuts on the agenda by the Federal ReserveTraders will be keeping an eye on the return of big-money investors, they may lay the groundwork for a more sustainable gold price after a two-year wait-and-see period.
As inflation-adjusted US Treasury yields surged to their highest levels since the financial crisis, investors have long avoided interest-free**, leading to continued outflows from ETFs, which has been a major headwind for gold prices.
But that may be about to change as the Fed signals that it will ease in 2024 and Treasury yields fall. Marcus Garvey, Head of Commodities Strategy at Macquarie Group, said:
"The environment conducive to capital inflows** is clearly returning. I'm still very optimistic about next year. ”However, in the midst of a chaotic period in which *** has fallen by $100 from last week's new high for the yearInvestors may still be cautious about entering the market。Historically,Gold prices still trade at a significant premium to US Treasury yields, which are one of the biggest drivers of gold prices.
Record gold buying by central banks helped absorb the sell-off by investorsAlthough the market's fears of the spread of the conflict in the Middle East have receded, ** is still running at a high level, laying a higher foundation for gold prices**. Even a small ETF buying resumption can have a significant impact on market sentiment.
Ole Hansen, Head of Commodities Strategy at Saxo Bank, said: "With central banks sweeping more than 1,000t** from the market for the second year in a row, the sell-off by ETF investors was easily absorbed. What would happen if they were all likely to be buyers of ** next year?
The size of these new buyers in the market may depend on how quickly the Fed cuts interest rates in the new year。At the moment, swap traders are expecting almost twice as much rate cuts as the Fed hinted at on Thursday, and if the Fed follows up with a cautious approach, gold could face **.
Carsten Menke, an analyst at Julius Baer, said, "There is no need for the Fed to quickly reverse monetary policy, therefore,We think **and** will be in a state of weakness
The market's attention will remain firmly on US economic data next year, with higher-than-expected inflation or strong jobs data likely to disappoint those betting that the Fed will cut rates multiple times. Macquarie's Garvey said:
"Markets will inevitably be disappointed with the Fed's path from now until it cuts rates. I think the market, after taking two steps forward, will take one step back. ”