On Wednesday (February 22), international gold prices rebounded slightly, but the market outlook is still bearish. Investors are waiting for the minutes of the Federal Reserve’s latest policy meeting to be released at 3 o’clock Beijing time on Thursday (February 23) to assess the prospect of further interest rate hikes.
At 15:32 Beijing time, spot gold rose 0.06% to $1,835.99 an ounce; the main COMEX gold futures contract rose 0.11% to $1,844.6 an ounce; the U.S. dollar index fell 0.10% to 104.091.
Matt Simpson, senior market analyst at City Index, said: “Gold is looking for life-saving straws, but considering that a lot of recent economic data has been strong, which has prompted a surge in U.S. bond yields, gold prices have not done badly.”
Data released on Tuesday (February 21) showed that the US Markit composite PMI unexpectedly rebounded to the highest level in eight months in February, matching the strong performance of previously released inflation, retail sales and employment data, further indicating the strength of the US economy. strong and tight labor market.
The upbeat data boosted market bets on a hawkish Fed, supporting the 10-year U.S. bond yield to a new high of 3.966% since Nov. 10 last year. And put downward pressure on the price of gold. The market expects that the Fed will not end raising interest rates in the first half of the year, and will raise interest rates above 5% in May and reach a peak of 5.352% in July.
Investors shifted their focus to the upcoming minutes of the Federal Reserve meeting, which may detail the case for a 25 basis point rate hike this month. Beyond that, investors will also be looking for guidance on the path of medium and long-term interest rates and inflation forecasts.
Matt Simpson of City Index said: “Traders will be more sensitive to any hawkish cues released by the Fed minutes, which may affect gold prices. For the foreseeable future, gold will test the $1,800 level before touching $1,900. More likely.”
The Fed will raise interest rates at its March, May and June meetings in response to a stronger economic expansion, Jan Hatzius, chief economist at Goldman Sachs, said on Tuesday, “and the recent numbers have been stronger than expected in terms of growth.” , we see higher inflation.”