24K99 News On Tuesday (November 14), gold prices rose as U.S. Treasury yields plummeted due to a weak U.S. inflation report, which put pressure on the U.S. dollar.
(Spot gold trend chart, source: FX168)
Spot gold is currently trading at 1963.00, an increase of 0.86%.
The settlement price of COMEX December gold futures closed up +0.2% at $1,966.7 per ounce.
[Market News Analysis]
Spot gold rose sharply, boosted by a sharp drop in the U.S. dollar and a rise in Treasury bonds. The release of U.S. inflation data sparked a strong reaction, boosting stocks and pushing the dollar to its lowest level in months. Precious metal prices continued to rise. Spot gold once hit a high of $1,970.91 per ounce, rising $27 from the daily low; spot silver rose by 3% during the day.
“CPI data was significantly weaker than expected, which is quite positive for precious metals,” said Daniel Ghali, commodities strategist at TD Securities. “We expect economic data to deteriorate significantly in the fourth quarter, which should weaken the dollar and support gold prices. “In the next six months, we expect gold prices to rebound to $2,100 per ounce.”
The U.S. Consumer Price Index showed annual inflation fell to 3.2% in October from 3.7% in September, below market expectations of 3.3%. Core inflation also slowed to 4% from 4.1%, the lowest level since September 2021. The data undermined expectations that the Federal Reserve would raise interest rates before the end of the year and boosted market expectations for the first rate cut since 2020. July to June 2024. U.S. Treasury yields plunged, benefiting gold, while the U.S. dollar index also fell, hitting monthly lows.
More U.S. inflation data, including producer price index (PPI) and retail sales data, are due for release on Wednesday. If these reports point to slower inflation and softer consumer data, gold’s rally could continue as markets reinforce expectations that the Fed has ended its tightening cycle.
ANZ strategists believe that the macroeconomic background for gold looks supportive. “Recent U.S. labor data show that employment and wages are trending downward and are close to levels consistent with the Federal Reserve’s 2% overall inflation target. With the Federal Reserve’s Restrictive policies seep into the economy and these trends are likely to continue. As a result, we believe US interest rates have peaked; US ISM Services PMI data confirms that underlying demand in the US is weakening. This provides support for lower UST yields and modest strengthening of the US dollar index Provides reasons why this is beneficial to gold investment demand.”
Carley Garner, co-founder of brokerage DeCarley Trading, said the U.S. dollar and bond yields have likely peaked, weakening the two important pressures on gold. The U.S. dollar has been holding fairly high so far, with strong support above 105. However, Garner said she expects the U.S. dollar index to weaken significantly in the near future. “We have to be very patient with our short dollar trades, but if interest rates have peaked and come down, based on our chart, the dollar should also fall,” she said. “Even though the dollar is moving higher, it’s not really changing. It’s moving lower.” It hangs here for a long time, and the longer it hangs, the heavier it gets; at some point, that’s going to help the gold.”
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[Focus on financial data and events in the next trading day (Beijing time)]
① 06:00 MSCI releases November index review report
② 10:00 Annual rate of total retail sales of consumer goods in China in October
③ 10:00 Annual rate of China’s industrial added value above designated size in October
④ 14:30 France’s ILO unemployment rate in the third quarter
⑤ 15:00 British October CPI monthly rate
⑥ 15:00 British October retail price index monthly rate
⑦ 15:45 French CPI monthly rate in October
⑧ 18:00 Eurozone trade balance after seasonally adjustment in September
⑨ 18:00 Eurozone industrial output monthly rate in September
⑩ 21:30 Canadian wholesale sales monthly rate in September
⑪ 21:30 US October retail sales monthly rate
⑫ 21:30 US October PPI annual rate and monthly rate
⑬ 21:30 US New York Fed Manufacturing Index in November
⑭ 23:00 Monthly rate of U.S. commercial inventories in September
⑮ 23:30 EIA crude oil inventories in the United States for the week to November 10
⑯ 23:30 EIA Cushing crude oil inventory in the United States for the week to November 10
⑰23:30 EIA strategic petroleum reserve inventory in the United States for the week to November 10