International gold prices benefited from the decline in U.S. bond yields, but the reason for the bullishness is still insufficient.

On Wednesday (September 29), the international gold price rose slightly, due to the lower yield of the US 10-year Treasury bond, which to a certain extent offset the view that the US interest rate hike was faster than expected-pushing the dollar index to refresh in early November last year Since the high point to 93.891.

At 16:07 Beijing time, spot gold rose by 0.32% to US$1,739.43 per ounce; the main COMEX gold contract rose by 0.12% to US$1,739.50 per ounce; the dollar index rose by 0.08% to 93.802; U.S. bond yields fell by 2.4 basis points to 1.56% .

Howie Lee, an economist at OCBC Bank, said: “Currently it is just a technical rebound… The reason for bullish gold is still not enough. We predict that by the end of 2022, the price of gold will reach around US$1,500, especially when it comes to reducing debt purchases. The plan has been completed and the Fed is considering starting to raise interest rates.”

The U.S. 10-year Treasury bond yield remains above 1.5%. Since the Fed demonstrated its hawkish tendencies last week, the US bond market has set off a selling craze. Investors are preparing for higher interest rates rather than higher inflation.

St. Louis Federal Reserve Chairman Brad reminded on Tuesday (September 28) that the Fed may need more aggressive measures to deal with high inflation, including two interest rate hikes next year.

Atlanta Fed President Bostic said that the US labor market is in a state of “chaos”. Workers are solving child care issues and responding to the spreading epidemic, but the United States is still on track to fully recover.

At the same time, Fed Chairman Powell said that the U.S. economy is still far from achieving full employment, and full employment is a key component of the Fed’s threshold for raising interest rates.

OANDA Asia Pacific Senior Market Analyst Jeffrey Halley said in a report that the price of gold has broken through the $1,740 support level. If the Fed continues to bet on its accelerated withdrawal, it may test the $1,700 mark this week.

SPDR Gold Trust, the world‘s largest gold exchange-traded fund (ETF), said its gold holdings fell to 990.03 tons on Tuesday.

U.S. Senate Republicans on Tuesday blocked the efforts of President Biden’s Democrats to prevent a potentially serious U.S. credit default, raising questions about whether congressional tensions between the two parties would threaten the U.S. economy.

U.S. Treasury Secretary Yellen once again warned members of Congress on Tuesday that the federal government’s borrowing capacity is nearly exhausted, and the current date for reaching the debt ceiling is October 18; she urged Congress to take action to avoid “serious damage” to the economy. .

JPMorgan Chase CEO Jamie Dimon said on Tuesday that he has begun to prepare for the possibility of the United States hitting the debt ceiling, but he expects that policymakers will find a solution to avoid this potentially catastrophic event.