On Friday, spot ** closed down 048% to $2,025 an ounce, closing up 047% to 4177%。Spot gold this week**nearly 070%。The yield on the 10-year Treasury note held steady at 3Around 70% The two-year Treasury yield** is about 2% this week, closing at 4 on Friday48%。The U.S. dollar index is up nearly 3% from its cycle lows and 012% to close at 10408.As risk appetite remains healthy, the index has failed to take full advantage of surging US Treasury yields.
Despite last week's thin data, an important theme has emerged that could impact gold prices in the near term. The resilient US economy and the hawkish stance of the Federal Reserve (Fed)** are slowly making it clear that most of the Fed** are not in a hurry to cut interest rates in the near future. They want to see inflationary pressures subside further in a broader way before gaining enough confidence to cut rates later this year. This means that a rate cut in March is practically impossible, which is consistent with Fed Chair Powell's statement after the FOMC.
Richmond Fed President Barkin said that the problems of regional banks in commercial real estate (CRE) are not enough for the Fed to cut interest rates early, as CRE is a well-known problem at the moment, and he expects the banking system to have enough capital to withstand risks. Barkin is a voting member of the Federal Open Market Committee this year. His views echo those of Fed Chair Jerome Powell's February 4 interview with CBS's "Sixty Minutes." In the interview, Powell said that commercial real estate risks are manageable because they are mainly concentrated in smaller banks. This stance of the Fed's main ** further undermines hopes of a sharp rate cut earlier this year, which has weighed on US Treasuries and therefore is not good for **.
With hopes of a rate cut in March waning, the swaps market is eyeing the Fed's May 1 decision.
The Federal Reserve breathed a sigh of relief when the latest data released on Friday showed that the Bureau of Labor Statistics found in its annual revision of monthly CPI data that inflation at the end of last year was about the same as the originally released data. The CPI data review is done to eliminate seasonal factors such as holiday shopping, harvest impacts, etc., in order to make meaningful comparisons within the same year.
At the same time, geopolitical tensions in the Middle East continue to simmer, with Israel starting to bomb the southern Gaza city of Rafah after rejecting Hamas's peace offer for a long-term ceasefire. Since the beginning of the war, more than 1 million people have taken refuge in Rafah. The UN has warned that the "humanitarian nightmare" could get worse if the attack on Rafah intensifies. Joe Biden of the United States criticized the extent of Israel's military operation, calling it "overdone." He stressed that there are "a lot of innocent people who are in trouble and on the verge of death". US Secretary of State Antony Blinken concluded his fifth visit to the region since the beginning of the war.
Total known global ETF holdings rose for the first time after 15 consecutive days of declines and now stands at 8,36510,000 oz.
It is worth noting that the gold price has remained above $2,000 since mid-December last year.
Next week, the main focus will be on the US CPI inflation data, which will be released on February 13. Last month's CPI year-on-year inflation data is expected to rise from 34% to 29%, which would be the lowest level since the beginning of 2021. Other key data released by the U.S. include the import** index for January, industrial production and retail sales growth. In addition, the Philadelphia Fed business outlook for February, the NAHB housing index, the University of Michigan confidence index and inflation expectations will also be key data to watch.
In Europe, the UK will release the December jobs report, January CPI inflation data, Q4 flash GDP and January retail sales data. The Eurozone and Germany will release their ZEW survey expectations (February) and preliminary GDP for the fourth quarter. Eurozone Q4 employment, December industrial production and ** balance (December) data are on the horizon. In addition, Japan's Q4 (preliminary) GDP and PPI (January) will also be of interest to investors.
Weaker bonds, healthy risk appetite, reduced likelihood of aggressive early rate cuts, a resilient US economy, a hawkish Federal Reserve (Fed) and some geopolitical issues that have been contained all mean further weakness. Investors will be keeping a close eye on the upcoming US CPI inflation data for clues that the Federal Reserve may cut interest rates. A significant absence of CPI data will push gold prices higher in anticipation of interest rate cuts. However, the marginal error may not be of much help as the Federal Reserve (Fed)** has made it clear that they want the inflation trend to continue to widen and that they can afford to be patient.
Raphael Bostic, president of the Federal Reserve Bank of Atlanta, said on Friday that policymakers must ensure that inflation returns to the central bank's 2% target; He stressed the need to "stay the course". His remarks succinctly summed up the Fed's current stance.