On Wednesday (September 20th), the Federal Reserve announced that its benchmark interest rate would remain unchanged, while suggesting that borrowing costs may remain high for a longer period of time after another rate hike this year. The monetary policy by 2024 will be much tighter than previously expected. Although gold is considered as a tool to hedge against rising inflation, higher interest rates have pushed up the yield of competing US treasury bond bonds and weakened its attractiveness.
After the Federal Reserve made a ruling, the US dollar recovered its lost ground and the yield of benchmark 10-year treasury bond bonds rose sharply. Although the Federal Reserve maintains interest rate stability, it has strengthened its hawkish stance and is expected to further raise interest rates by the end of the year. Monetary policy will significantly tighten by 2024, far exceeding previous expectations. Federal Reserve Chairman Jerome Powell stated that officials will hold "one meeting after another" on interest rate issues. "We are prepared to further raise interest rates in appropriate circumstances," and officials are "prepared to further raise interest rates in appropriate circumstances, and we intend to maintain policy at a restrictive level until we are confident that inflation is continuing to decline towards our goals." Regarding interest rate cuts, Powell said, He never intended to signal any timing of interest rate cuts. At an appropriate time, we will have the opportunity to lower interest rates. Part of the reason for the decision to lower interest rates may be that real interest rates are rising because inflation is falling. "Regarding inflation, Powell said, We are committed to achieving and maintaining a monetary policy stance that is sufficiently restrictive to reduce inflation to the target of 2% over time. Although price pressures have shown some encouraging signs of easing, the goal of bringing inflation back to 2% is far from over, "Powell said Since the middle of last year, inflation has eased, and extensive surveys of households, businesses, and forecasters, as well as financial market indicators, indicate that long-term inflation expectations seem to remain stable. Nevertheless, there is still a long way to go to continue reducing inflation to 2%, "he said. Powell also stated that the Federal Reserve has not yet fully believed that inflation is on the right track. Overall, stronger economic activity means that we must take more measures in terms of interest rates, which is what the meeting told you, "Powell said. The Federal Open Market Committee has maintained the target range of the federal funds rate between 5.25% and 5.5%, and the latest quarterly forecast shows that 12 out of 19 officials are in favor of raising interest rates again in 2023, highlighting the desire to ensure continued inflation deceleration. In response, gold futures have been trading higher this week and this year, but have fallen so far this month and this quarter. Due to the Federal Reserve's more hawkish dot matrix than expected, gold and silver have already fallen. Tai Wong, an independent metal trader in New York, said, "Metal pricing is suitable for a more dovish Fed
Jefferies economist Thomas Simons said he also expects the Federal Reserve not to raise interest rates again this year and believes that interest rates may be lowered in early 2024. According to today's communication with the Federal Reserve, we have not changed our expectations for policy. We still expect 5.375% to prove to be the final interest rate for this cycle, and the Federal Reserve will have to lower interest rates more significantly in the first half of 2024 than market pricing (with a possibility of another rate hike at the next meeting approaching 30%) or as described in the dot matrix, "he said. Technically, Kim Wyckoff, a senior analyst at Kitco, wrote that from a technical perspective, the price of December gold futures reached a two-week high and closed near the intraday high. On the daily bar chart, prices also showed a bullish outsourcing graph. Bears still have an overall technical advantage in the near future. On the daily bar chart, a 4-month downward trend has already appeared. However, more short-term gains will offset the downward trend in prices and indicate that the market bottom has been reached. The next upward target for bulls is to close above the stable resistance level of $2000. The next short-term downside goal for bears is to push futures prices below the solid technical support of August low of $1913.60. The first resistance level was seen at $1975.00, followed by a September high of $1980.20. The first support level was seen at $1950.00, followed by this week's low of $1943.80.
Gold: daily fluctuations; The MACD gold cross and KDJ gold cross, before falling short of the 200-day moving average of 1923.80, slightly shifted towards a volatile upward trend in the future. The initial resistance refers to the position near the 100-day moving average of 1944.25. The resistance at the high point on September 1 is around 1952.79, and the track resistance on the Bollinger Line is also near this position. If this resistance can be overcome, it will increase the bullish signal in the future. Due to the interweaving of moving averages, the J-value of KDJ also sends a short-term overbought signal, and the short-term trend is highly variable. If it falls below the 10 day moving average of 1920.92, it will weaken the bullish signal in the future; For further support, refer to the 1910 and 1900 levels respectively. The trend of the central line is based on the breakthrough situation in the 1886.10 to 1950.58 area of the Bollinger Line track. Market indicators indicate a tightening of supply and demand. The American Petroleum Institute reported that national inventories decreased by 50000 barrels last week, including a decrease in the Cushing Center. A separate evaluation by AlphaBBL Corp. also indicates a decrease in storage sites in Oklahoma. The official data is expected to be released later on Wednesday. Due to further pressure from elastic demand on the supply side, more production has been reduced. In fact, OPEC continues to predict strong oil demand growth in 2023 and 2024, while maintaining supply constraints in Saudi Arabia and Russia and extending voluntary production cuts. In addition, we have received some additional supply from recent side impacts from Libya and Kazakhstan. As long as the economy remains resilient, we may continue to see high oil prices, "said Alexander Dyukov, head of Gazprom Neft, a Russian oil company, on Wednesday." If the global oil market faces shortages, OPEC+major oil producing countries will take action. Due to Saudi Arabia and Russia extending additional production reduction measures. Institutions including the International Energy Agency believe that OPEC+production cuts will mean a significant market deficit in the fourth quarter. Dyukov believes that the global oil market is currently balanced, while oil prices are fair. He also stated that the proposed increase in Russian fuel export tariffs can only have a temporary impact on addressing domestic market shortages. Previously, it was reported that Russia plans to impose an export tariff of $250 per ton on petroleum products to address fuel shortages. Russian oil producers supplied the first batch of CPC blended crude oil to the United Arab Emirates in August and September, indicating that Russia has opened up a new export route. As the world's third largest oil exporter, Russia has shipped most of its oil to China, India and Türkiye in the past year, and also exported oil to Brazil, Sri Lanka and Pakistan. Traders stated that the UAE itself is a large oil producing country, supplying Murban oil to the international market and sometimes importing different grades of oil for its refineries to optimize price differentials. Traders stated that the CPC blended oil delivered by Russia to ports in the United Arab Emirates in September will be cheaper than the local Murban oil in the UAE. The previous increase in crude oil prices was mainly due to supply restrictions imposed by OPEC+powers Saudi Arabia and Russia, as well as optimistic economic forecasts from the world's largest economies, the United States and China. The rise in oil prices has sparked discussions about the possibility of oil prices returning to $100 per barrel. Daniel Hynes, senior commodity strategist at ANZ, believes that oil prices are expected to continue to rise and are expected to exceed $100 per barrel by the end of the year. Hynes said, "Observing the fundamentals, it can be seen that the market's tight state is expected to continue. The current upward trend is not only driven by supply factors, but also on the demand side, at least the market's expectations are improving, which will continue to drive oil prices higher for the rest of this year." Hynes said that the market momentum is strong, and OPEC seems determined to reiterate its oil policy, while demand is also quite strong. JPMorgan Chase has stated that if further supply cuts are made, oil prices may rise to $120 per barrel, which will lead to a stagnation of economic growth in the next quarter. Crude oil: daily high volatility; KDJ Golden Cross, with the 5-day moving average re crossing the 10 day moving average, the oil price has initially broken through the middle track of the Bollinger Line and stood above all moving averages. In the future, it is biased towards bulls and is expected to further rise towards the vicinity of 84.07 on the Bollinger Line; In the short term, there is also some resistance around the high point of 82.45 on August 21 and 82.89 on August 15, respectively. The middle track support of the lower Bollinger Line is currently around 81.17, the 10 day moving average support is around 80.39, and last Friday's high support was also around this position. Due to the MACD dead cross signal still present, if oil prices fall below this position, it will weaken the bullish signal in the future; Further support refers to the position near Tuesday's low point of 79.34, with the support of the Bollinger Line's lower track near 78.26. The mid line trend of oil prices needs to pay attention to the breakthrough of the Bollinger Line track from 78.26 to 84.07.
