Finance Recently, the U.S. economy is facing a poetic challenge, with stubborn inflation and unexpectedly strong job market data like an intricate symphony, haunting the ears of economic leaders. According to the monthly non-farm payrolls report, the U.S. economy created an average of more than 210,000 new jobs per month in the second half of 2023, barely slowing down and far exceeding the level of growth needed. However, this ongoing inflation woes may have far-reaching implications for the Fed's future interest rate path. For eight months in a row, inflation has hovered around 3%, well above the Fed's long-term target of 2%. The core CPI index has been hovering around 4% since September 2022 and surged to 3% in January 20239%。The three-month and six-month core inflation rates also suggest that inflation is still some way from target.
While monthly data is susceptible to one-off distortions, the upward trend in inflation in January showed signs of losing momentum, which could have important implications for future economic trends. In addition, the upcoming *** also brings a lot of uncertainty to the Fed's future path.
Market watchers are beginning to speculate about the possibility of a rate hike this year, although this is still low, at around 8%. But if the probability of a rate hike is close to 50%, then the market could be put to the test. At that point, the dollar is likely to strengthen, bond yields may rise with it, and a correction is likely.
In this context, ** has been favored as a store of value. Recently, it has exceeded $300, largely due to geopolitical risks and the global election calendar. However, it wouldn't be surprising if the Fed downplayed the possibility of rate cuts in the future, causing *** to partially give back some of its previous gains. Once the rate cut becomes clear, it is expected to be substantial.
Overall, the U.S. economy is in a complex situation, with rising inflation and an exceptionally strong job market. In this environment, the Fed needs to develop a more prudent monetary policy to ensure the stability and sustainability of economic growth. In this regard, Windsor Brokers, a well-known institution, conducted an in-depth technical analysis of the trend of gold prices. According to them, **tested the all-time highs again on Tuesday, and the bulls may resume their momentum after a brief respite. Gold closed above $2,100 an ounce on Monday, extending its rally on Tuesday to achieve its fifth consecutive session**. The decline in U.S. manufacturing activity and weak consumer confidence have triggered strong demand for safe-haven assets**.
Currently, spot is trading around $2,125 an ounce. On Tuesday, the price of gold jumped 13$53, an increase of 064% to close at 2127$76 oz. Gold briefly broke through $2,140 an ounce during the session and touched as high as $2,141$66 an ounce, approaching the all-time high of 2144 set on December 4 last year$68 oz. According to Windsor brokers, if gold can break through resistance near all-time highs, it could trigger a new round of acceleration**, paving the way for gold to rise to the $2,200 ounce level or beyond.
However, due to the significant resistance and strong pressure encountered by the gold price last time it reached this level, coupled with the fact that the gold price is currently in a strongly overbought condition, it is expected to face increased resistance when reaching this area. Windsor Brokers believes that there is limited room for gold and will ideally find support in the $2100 2080 ounce area, thus maintaining bullish sentiment and providing a more favorable position to re-enter the bullish market.