On Friday (September 22nd), spot gold prices slightly increased, but as the US dollar fell from a 6-month high, gold prices eased somewhat, despite the weak outlook for long-term interest rate hikes after the Fed took a hawkish stance. Gold's performance this week has also been relatively flat, as concerns about rising interest rates have intensified, leading to a sideways trend in gold prices.
Spot gold prices rose 0.39% (or 7.53) to close at $1927.33 per ounce.
COMEX October gold futures rose 0.31% to close at $1927.20 per ounce, with a cumulative decline of 0.03% this week.
COMEX December gold futures closed 0.31% higher at $1945.6 per ounce, down 0.03% this week.
COMEX October silver futures closed 0.64% higher at $23.627 per ounce, up 1.92% this week.
COMEX December silver futures closed 0.66% higher at $23.844 per ounce, up 1.96% this week.
Market News Analysis
Due to the continued uncertainty in the interest rate outlook, gold prices have consolidated sideways this week. The Federal Reserve maintains interest rates unchanged, but leaves room for further tightening of policies.
Unlike other G7 economies, the United States maintains resilience with a strong labor market and optimistic consumer spending.
Despite S&P's preliminary PMI report for September being weak, gold prices are still struggling to find direction. The manufacturing PMI fell to 48.0, in line with expectations and slightly higher than the previous value of 47.9. Economic data has been shrinking for a long time, and numbers below 50.0 are themselves considered a contraction of economic activity. The PMI of the service industry, which tracks two-thirds of the US economy, dropped to 50.2, compared to an expected 50.6 compared to 50.5 previously released.
Meanwhile, investors remain uncertain about the peak interest rate after the Federal Reserve announced monetary policy on Wednesday. Due to the resilience of the US economy, expectations for another rate hike by the Federal Reserve still exist, limiting the upward space for precious metals. Due to the continuous decline in core inflation, gold also appears to have received good support.
The global demand for gold remains high, with former Eastern European countries such as Russia, Arab countries, Singapore, Poland, and Hungary all purchasing gold. Gold holds greater importance in non Western countries. In the past 20 years, China and India, the world's two largest gold consumers, have imported 35000 tons of gold.
Summary of institutional comments
(1) As a non yielding asset, higher interest rates are often proven to be a headwind for gold prices, as they increase the opportunity cost of holding gold, "Kinesis Money market analyst Mike Ingram said in an email comment.
(2) George Milling Stanley, Chief Gold Strategist at State Street Global Advisors, stated that the key to driving investment demand growth may be to further educate investors on the benefits of using gold as part of a diversified investment portfolio.
(3) Leveraged compression is the reason why gold companies perform poorly relative to gold prices, "said Lawrence Lepard, founder of Equity Management Associates. In my opinion, something will happen, possibly within three to 18 months at the most. At that time, they will have to reverse these policies, the money supply will have to grow again, inflation will return and have serious consequences, and gold will break through the high of $2100 per ounce
(4) According to Ronald Peter St? Ferre, a fund manager and researcher at Incrementum AG, the West is losing control over gold prices, and central bank purchases are currently the main price driver.
Next week, we will focus on financial data and events
① September CBI Retail Sales Margin in the UK (Monday)
② New home sales in the United States in August month on month (Tuesday)
③ Bank of Japan Announces Minutes of July Monetary Policy Meeting (Tuesday)
④ Year-on-year profit of industrial enterprises above designated size in China in August (Tuesday)
⑤ Changes in EIA gasoline inventory for the week of September 22nd in the United States (10000 barrels) (Wednesday)
⑥ Yearly quarter on quarter final value of the US GDP deflator for the second quarter (Thursday)
⑦ Japan September Tokyo CPI YoY (Thursday)
⑧ Core PCE Price Index for August in the United States YoY (Friday)
⑨ Canada's July GDP YoY (Friday)
⑩ China's Official Manufacturing PMI for September (Friday)
