Last week, the price of COMEX gold rose 4.18% to 2350.00 US dollars/ounce, and Shanghai Gold mainly rose 1.92% to 541.52 yuan/gram.
The job market is once again strong. Following the rise in ADP data for small farmers that exceeded expectations, non-agricultural data once again became the focus of the market. According to the data, the US non-farm payrolls recorded 303,000 people after the March seasonal adjustment, exceeding the forecast value of 200,000. The unemployment rate in March declined slightly from the expected value, reaching 3.8%. After the data was released, the yield on US 10-year Treasury bonds soared 1.22%, and the US dollar index rose sharply. At one point, it hit 104.69 points, and COMEX gold fell nearly 0.70%. Looking at the long-term cycle, since November 2023, non-agricultural data has recorded an increase that exceeds expectations for 5 consecutive months. The job market has exceeded expectations, or to a certain extent, the strength of the US economy is showing that the US economy is strong, hitting the market's expectations of interest rate cuts.
On the other hand, recent Federal Reserve officials have continued to speak loudly, and market concerns about the arrival of monetary policy easing may increase. Specifically, Federal Reserve officials Bowman and Logan both believe that it is too early to talk about interest rate cuts now. Officials Bostic said they predict that interest rates will be cut once this year, and they tend to open the window for interest rate cuts in the fourth quarter. Officials Kashkari, on the other hand, are more aggressive, pointing out that if progress in controlling inflation stagnates and the economy remains strong, there is no need to cut interest rates this year.
Market interest rate cuts have once again declined due to the double impact of hot employment data and the outcry of Federal Reserve officials. Judging from the data, in terms of the number of interest rate cuts, the current US interest rate futures pricing The Federal Reserve will cut interest rates twice in 2024, and the forecast for the number of interest rate cuts has shrunk again; in terms of when the interest rate cut window opens, the Fed's interest rate watcher shows that the market's forecast for when the interest rate cuts will open or be postponed from June to August, and the time the interest rate cuts will be implemented has regressed again.
Strong job market performance and the Federal Reserve's hawkish statement weighed on market expectations of interest rate cuts, and may weaken COMEX gold. However, judging from actual performance, although COMEX gold retracted due to non-agricultural data, the market quickly recovered its losses and reached a new high, once reaching 2,035 points. On the market, the conflict between the Middle East, Russia, and Ukraine may boost risk aversion in the market, making the market more concerned about safe-haven demand supporting gold prices compared to the impact of non-agricultural data and official statements. It is expected that gold prices will remain strong in the short term. This week, we need to focus on the upcoming CPI and PPI data. This will play an important role in determining whether the Federal Reserve will open a window to cut interest rates in June, and be wary of the impact of inflation data that exceeds expectations on the market.
Source: Wind, Jin10 Data, Everbright Futures Research Institute
Written by Wu Aihua
Professional qualifications: F3074355
Investment Advisory Qualification: Z0017696
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