9.16 Gold Short-term Analysis Guide

16 sept.

Last Friday, an article from the "Federal Reserve's mouthpiece" once again fueled speculation that the Fed might cut interest rates by 50 basis points at this week's policy meeting. The dollar index continued to fall and once lost the 101 mark, but recovered some of its losses during the U.S. trading session and finally closed down 0.13% at 101.10. U.S. Treasury yields fell slightly, with the benchmark 10-year Treasury yield closing at 3.657%; the two-year Treasury yield, which is more sensitive to monetary policy, finally closed at 3.595%. The Dow Jones Industrial Average closed up 0.72%, the S&P 500 closed up 0.54%, and the Nasdaq closed up 0.65%. Trump Media closed up 7.62%.

Today's focus:

The eurozone will release the seasonally adjusted trade account for July;

The United States will release the New York Fed Manufacturing Index for September;

☆ Closed reminder: Today, the Tokyo Stock Exchange, Seoul Stock Exchange, Shanghai, Shenzhen and Beijing Stock Exchange

The market's expectations for the Fed's upcoming interest rate cut continue to heat up. , the market currently expects the Fed to cut interest rates by 50 basis points at the September 18 meeting to reach 43%, while the probability of a 25 basis point cut is 57%. This is the first possible rate cut by the Fed since 2020. The driving effect of the expectation of rate cuts on gold prices is obvious. The lower interest rate environment reduces the holding cost of gold and increases its attractiveness as a non-yielding asset.

Before the Fed meeting, gold prices usually show a trend of fluctuating higher. However, after the rate cut, gold prices may experience adjustments. Therefore, investors need to be vigilant about possible market reactions.

Monetary policy changes by major central banks around the world have an important impact on the gold market. The ECB's rate cut decision last Thursday reduced the opportunity cost of holding gold and further strengthened market expectations for loose policies. At the same time, U.S. inflation data has stabilized, providing the Fed with more room to consider rate cuts.

With the easing policies of the Federal Reserve and the European Central Bank, the bullish sentiment in the gold market has significantly increased. In addition, the depreciation of the U.S. dollar against the yen has further increased market interest in gold.

The strong performance of the gold market was also driven by fund inflows. Data shows that the holdings of SPDR Gold Trust, the world's largest gold-backed ETF, have reached their highest level since January this year. The World Gold Council (WGC) reported that global physical gold ETFs attracted inflows for the fourth consecutive month in August, which further supported the rise in gold prices.

In addition, geopolitical risks are also an important factor in the rise in gold prices. Geopolitical tensions in major economies around the world have increased market uncertainty and further boosted demand for gold as a safe-haven asset. These factors, including the Russian-Ukrainian conflict and tensions in the Middle East, have prompted investors to put their money into gold to avoid potential risks.