The expectation of China's economic policy in 2024 should also include at least the active expansion of fiscal policy and the coordinated easing of monetary policy. With the US economy outperforming market expectations, the possibility of another sharp strengthening of the dollar index in 2024 should not be overlooked.
Powell said: "Interest rate cuts are starting to appear in the foresight," and in response to a reporter's question, he revealed that interest rates will be cut before inflation falls back to 2% to avoid excessive tightening. In December 2023, the Federal Reserve maintained the federal interest rate at 525%-5.50% unchanged, the fourth pause in rate hikes after June, September and November. The dot plot shows that more than half of the Fed expect to cut rates at least three times (75bp) in 2024, with the median federal rate falling to 4 by the end of 20246% (September dot plot: 5.)1%）。The probability of the Fed cutting interest rates in March has decreased, and gold prices have adjusted at a high level.
U.S. Treasury yields have risen, with the 10-year U.S. Treasury real yield of 183%, +015pcts, the residuals calculated by the real rate of return model are 1175$0 oz., +26$7 oz. The Federal Reserve released the minutes of the FOMC meeting, and the minutes downplayed the previous "** remarks, while the non-farm payrolls data exceeded expectations, and the expectation of interest rate cuts cooled down for a while, but the U.S. ISM non-manufacturing PMI fell more than expected, showing that the economy still has great downward pressure, supporting gold prices to stabilize.
Market expectations for the Fed's interest rate cut may still be revised, and the dollar index and US Treasury yields are putting pressure on metals. The off-season of domestic metal consumption is not light, the inventory of aluminum and zinc maintains a downward trend, and the processing fee of copper concentrate has reached a new low under the disturbance of overseas mines. This week's Fed Beige Book showed little change in economic activity over the past few weeks, but there were signs of a cooling labor market in most regions,** and market expectations for interest rate cuts were further adjusted.
The Fed holds eight interest rate meetings a year, and the minutes of the meeting are a detailed explanation of the policy formation process and the logic behind the policy, and are generally released three weeks after the meeting. The Fed believes that the risk of a rebound in inflation due to insufficient rate hikes and a recession due to too many rate hikes are roughly balanced, so the policy rate may have peaked and a rate cut in 2024 should be appropriate, but did not discuss a specific timing of the rate cut.
Judging from recent economic data in the United States, the U.S. job vacancy rate in November was unchanged from the previous value at 53%, although the manufacturing PMI continued to be below the boom and bust line, the consumer confidence index and the service PMI both rebounded, reflecting that consumption is still resilient. In terms of real estate, house prices continued to slight as of November**. From this point of view, there may be a need for a correction in the optimistic expectation of interest rate cuts in the United States, so **continue to be dominated at high levels, and the direction is still unclear.
International political risks are rising, and the demand for safe haven is increasing. Taking history as a mirror, under the major global risk events since the 70s of the 20th century, ** has performed well, and compared with other safe-haven assets, it can be called a "one-of-a-kind" winner. In 2024, considering many factors such as the intensification of global political polarization overseas, the impact of the Red Sea shipping problem on the weak ** chain, geopolitical turmoil and global economic uncertainty, the safe-haven attribute of ** will be further highlighted and favored.
The Fed's interest rate cut expectations have strengthened, the dollar has shown obvious signs of weakening, and central banks will continue to "sell the dollar and add **" in order to reduce their dependence on the dollar, and this demand will continue to increase in 2024. According to the Central Bank Reserve Survey, 71% of central banks surveyed believe that global central bank holdings will increase over the next 12 months, up from 61% last year. Riding a bull and a bear believes that the bearish factors for gold prices will appear frequently in 2023, but it is unbelievable that *** will change the decline and break the position and rise sharply, and it is conceivable that 2024 will inevitably rise again under the stimulation of good news.
February** Dynamic Incentive Program