Gold rose sharply on Tuesday, hitting a five-month high of $1,824, an increase of more than $40 from the intraday low. The short-term fluctuations were very strong. After the market opened on Wednesday, the price of gold fluctuated sideways, temporarily trading at $1,809, and the market was very light. The U.S. November CPI data strengthened the market’s bet on the Fed’s slowdown in raising interest rates, pushing gold prices up in the short term. The focus of the market within the day is on the Fed’s interest rate decision. Short-term fluctuations may be very violent. Investors should pay attention to risk control.
Huang Lichen, a star analyst at Wolfinance, believes that this Fed meeting is very important. It will be a key node for the Fed to transition from the first stage of sharply raising interest rates to fight inflation to the second stage of slowing down the pace of interest rate hikes. It may release some signals of the third stage of maintaining higher interest rates at a certain level for a period of time.
Let’s look at the three phases of the Fed’s tightening of monetary policy:
The first stage is the stage in which the Federal Reserve raised interest rates sharply in order to fight inflation. During this period, the Federal Reserve raised interest rates substantially from zero. The most obvious performance was the continuous rate hike of 75 basis points in the past four meetings.
The second stage is the stage in which the Fed slows down the pace of interest rate hikes. After the Fed raised interest rates by 75 basis points in a row, it began to slow down the rate of interest rate hikes. This stage is the stage that the Fed is about to enter. The market expects the Fed to raise interest rates by 50 basis points tonight. base point.
The third stage is the stage in which the Fed keeps interest rates at a relatively high level for a period of time until inflation falls back to the target level of 2%.
As far as this Fed meeting is concerned, Huang Lichen, a star analyst at Wolfinance, advises everyone to focus on six points:
The first point is whether the Fed will slow down the rate hike tonight. Regarding this point, it can be said that the answer has already been revealed, and the Fed has a high probability of raising interest rates by 50 basis points.
The second point is that the Federal Reserve slowed down the rate hike to 50 basis points tonight, and whether it will continue to slow down the rate hike to 25 basis points at the next meeting, or continue to raise interest rates by 50 basis points. On that note, there is currently a surge in bets on a 25bp rate hike at the Fed’s next meeting (after tonight’s hike), with less than a 30% chance of a 50bp hike.
The third point is what is the terminal interest rate. Regarding this point, the Fed’s latest forecasted terminal interest rate is 4.6%, and the market has recently predicted that the terminal interest rate will be above 5%. interest rate twice 25 basis points.
The fourth point is how long the terminal interest rate will be maintained before the interest rate cut. Regarding this point, after the Fed’s interest rate hike has entered the third phase, the market expects that the Fed may cut interest rates as early as next year, and the Fed may dispel this market expectation tonight, and of course it may not.
The fifth point is how the Fed views the peak of inflation. Regarding this point, the Federal Reserve’s CPI growth rate fell in October, initially showing a signal that inflation had peaked, and the CPI continued to decline in November, strengthening this signal. However, US inflation is still at a high level, and there is a long way to go to reduce inflation.
Sixth, how the Fed views the recession. The market generally believes that the United States will fall into an economic recession next year, but the recent US economic data has shown strong performance, and some people have begun to believe that the US economic recession will be mild and short-lived.
Yesterday we believed that if the US CPI declines in line with expectations, it may cause short-term fluctuations of 10 to 20 US dollars in gold. If the CPI data is significantly lower than expected, gold may rise even more. The final CPI and core CIP data are both lower than It is expected that gold will rise by $20 in the short term, up to $35, and the rally is basically in line with expectations. All the analysis tonight will be based on the forecast of the Federal Reserve meeting. The Fed’s slowdown in raising interest rates will undoubtedly benefit gold prices, while higher terminal interest rates and longer durations may weigh on gold prices on the previous basis.
On the gold daily chart, the Bollinger Bands began to open upwards, trying to open up room for further rise. The moving average indicator golden cross is upward, and the middle rail of the Bollinger Bands is running upwards, and the multi-party is dominant overall; The RSI index is slightly golden cross, and the short-term multi-party is dominant, but the advantage is not obvious and may change at any time.
Gold intraday reference: The price of gold is currently fluctuating sideways and may fluctuate violently at night. The lower part focuses on the support of $1790 and $1770, the upper part focuses on the resistance of $1825 and $1840, and the short-term range focuses on $1800 to $1815.