Global inflation is rampant; when will interest rate hikes be implemented? Is there still room for gold to rebound?
November 18: Spot gold continues to fluctuate at a high level, currently trading below $1870 per ounce. Recently, inflation in the US, EU, and UK has soared. Before central banks raise interest rates, gold will continue to be sought after by investors as a strong factor against inflation. The market will also see the US initial jobless claims data in the evening, which investors need to closely monitor. Thursday (November 18), spot gold opened at $1867.50 per ounce. As of press time, spot gold is recorded at $1867.62 per ounce. US initial jobless claims data released in the evening; investors need to pay close attention Initial jobless claims may remain below the key psychological level of 300,000 for the sixth consecutive week. The steady decline in initial jobless claims over the past few months highlights the continued improvement in the job market recovery, especially on the demand side, as employers seek to retain workers. However, labor supply remains tight. Data released last week by the US Department of Labor showed the extent of this shortage, with near-record-high job openings, and the resignation rate soared to a record high of 3.0% in September. This, in turn, has encouraged businesses to work hard to retain employees, leading to a decline in the number of weekly unemployment benefit applications. Global inflation is becoming increasingly severe; gold is expected to continue to rise before interest rate hikes The UK CPI data released on the previous trading day hit a 10-year high, and US consumer prices in October also accelerated. The rise in inflation has also strengthened market bets on the Bank of England raising interest rates in December and the Fed raising interest rates next year.
Time:
2021-11-20 15:29
November 18 Spot gold continues to fluctuate at a high level, currently trading at $1870 US dollar /ounce below. Recently, inflation in the United States, the European Union, and the United Kingdom has soared, and central banks Before raising interest rates, gold will continue to be sought after by investors as a powerful tool against inflation. The market will also welcome the US initial jobless claims data in the evening, which investors need to closely monitor.
Thursday (November 18) spot gold opened at $1867.50/ounce, and as of press time, spot gold is temporarily recorded at $1867.62/ounce.
US initial jobless claims data released in the evening Investors need to pay close attention
At 21:30 Beijing time on Thursday (November 18), the US Department of Labor will release the report on the number of jobless claims for the week ending November 13. The number of new applications for unemployment benefits in the US is expected to reach a new low during the epidemic again, and the weekly ratio of new unemployment is close to the level before the virus outbreak. Analysts expect the initial jobless claims to be 260,000 for the week ending November 13, compared to 267,000 the previous week. The number of continuing jobless claims for the week ending October 30 is expected to be 212,000, compared to 216,000 the previous week.
The number of initial jobless claims may remain below the key psychological level of 300,000 for the sixth consecutive week. The steady decline in the number of initial jobless claims over the past few months highlights the continued improvement in the recovery of the job market, especially in terms of demand, as employers seek to retain workers.
However, labor supply remains tight. Data released by the US Department of Labor last week showed that the near-historically high number of job openings reflects the extent of this shortage, with the resignation rate soaring to a record high of 3.0% in September. This, in turn, has encouraged companies to work hard to retain employees, leading to a decline in the number of weekly applications for unemployment benefits.
Target's chief operating officer, John Mulligan, said on Wednesday: "The labor force will continue to be tight, and we will continue to focus on retaining our existing team."
Meanwhile, the cost of attracting employees is rising for many companies, with many companies raising wages and bonuses. Target and Walmart (the largest privately held employer in the United States) both mentioned rising labor costs in recent survey results, while many other companies have also seen rising compensation expenses.
Thursday (November 18) US dollar index continued its downward trend and fell slightly. On the previous trading day, US dollar index fell back from a 16-month high. If the number of jobless claims performs optimistically, it is expected to further boost market expectations for Federal Reserve interest rate hike expectations, which is good for the US dollar. At the same time, the market will also pay close attention to the intensive speeches by Federal Reserve officials in the evening.
The global inflation problem is becoming increasingly serious, and gold is expected to continue to rise before interest rate hikes.
The UK CPI data released on the previous trading day hit a 10-year high, and US consumer prices in October also accelerated. The rise in inflation has also strengthened market expectations for Bank of England interest rate hikes in December and the Federal Reserve next year.
The Bank of England is expected to be the first major central bank to raise interest rates since the coronavirus swept the global economy, and investors and economists are increasingly confident that it will raise interest rates on December 16. Data released on Tuesday showed that the UK's labor market has withstood the end of the government's job retention subsidy program, a key factor for the Bank of England and its interest rate decisions.
Chicago Federal Reserve President Evans reiterated on Wednesday that even if the Federal Reserve assesses whether high inflation subsides as he expects, it will not be completed until mid-next year to reduce bond purchases. But he also admitted that given that price pressures have been around for a long time, he is less confident in his baseline view that inflation will subside next year than a few months ago.
European Central Bank Executive Board member Schnabel said that if euro zone inflation lasts longer than expected, the European Central Bank must be prepared to control inflation, suggesting differences among policymakers. Schnabel reiterated the European Central Bank's view that price growth will slow next year, but she warned that the outlook has become more uncertain and policymakers should remain open-minded.
Stephen Innes, managing partner of SPI Asset Management, said: "Currently, the gold market is positioning for the Federal Reserve to take action, but the biggest question is whether they will accelerate the reduction of stimulus. Before the Federal Reserve really sends a signal to accelerate the reduction, gold should hold the current range of $1850-1875, and Brainard, who is considered a super-dove, may be appointed as the new chairman of the Federal Reserve, which may push gold above $1870."
Technical analysis
From the daily chart, gold price rose sharply on Wednesday, recouping the losses of the previous two days, showing that the bullish momentum is still strong, and it is expected to continue to rise during the day.
If the bulls continue to attack, the initial resistance above will focus on the high of $1877.15 on November 16, and further focus on the high of $1890.10 and $1900.00 on May 19.
Technically speaking, the MACD golden cross, but the overbought signal still exists. Despite this, the gold price is still more up than down in a one-sided market.
The US dollar index fell sharply after hitting a high yesterday, and the bulls suffered a certain blow. There is little chance of a sharp rise during the day. If the initial claims data in the evening shows an unexpected increase, the US dollar may fall accordingly, and the gold price will strengthen again. It is worth mentioning that the initial claims data has been declining for six consecutive weeks.
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Although gold prices rose this week, market volatility has clearly increased. While the US-UK agreement is symbolic, its content is limited and insufficient to alleviate concerns about a global economic slowdown. Therefore, gold prices will continue to fluctuate between safe havens and policy signals, closely monitoring the Federal Reserve's interest rate expectations and global trade sentiment.