On Monday (October 3), the international gold price rose slightly due to a weaker dollar, but the prospect of a continuation of the aggressive policy stance of global central banks limited gold’s gains. Investors focus on the US non-farm payrolls data to be released on Friday (October 7).
At 15:21 Beijing time, spot gold rose 0.26% to US$1,666.43 per ounce; the main COMEX gold futures contract rose 0.17% to US$1,674.9 per ounce; the US dollar index fell 0.18% to 112.008.
Yeap Jun Rong, market strategist at IG, said: “Gold bulls may be happy to see a moderate (non-farm payrolls) data to facilitate a rebound in gold prices, but the continuation of the Fed’s aggressive hawkish policy still suggests that the overall downward trend in the gold market may remain unchanged.”
The Fed will get further investor attention as the market enters the final quarter of the year. Despite the risk of a recession, policymakers are firmly in favor of raising interest rates. This stance has been and will continue to be bearish for gold.
Fed Vice Chairman Brainard said on Friday (September 30) that she fully supports the Fed’s longer-term interest rate hike plan to curb inflation, and “the focus of monetary policy is to restore price stability in a high inflation environment.”
Brainard said the tightening of financial conditions as a result of the rate hike, but it will take time for its full impact to play out in the economy and reduce price pressures, “To ensure inflation is returning to target, we are committed to avoiding premature exits. (Rate hike).”
Last month, the Federal Reserve raised interest rates by 75 basis points for the third time in a row, and signaled that there will be more hikes this year. Meanwhile, euro zone inflation hit a record high last month, reinforcing expectations that the European Central Bank will continue to raise interest rates sharply this month.
Brainard said it was too early to declare victory over price pressures, “with high inflation in the U.S. and abroad, the risk of an additional inflation shock cannot be ruled out.” Consistent attitudes – There must be clear evidence that inflation is slowing before austerity is eased.
Open interest in the COMEX gold futures market fell for the second consecutive trading day on Friday, by about 21,300 lots, the largest one-day drop since March 10; open interest also decreased. Trend traders have little short-term entry value.