On Thursday (April 13), international gold prices rose for the third consecutive trading day, as the overall moderate US inflation data for March released overnight prompted people to bet that the Federal Reserve may start to cut interest rates in the second half of the year.Gold prices may hit a record high in the second quarter, reaching about US22,080.
Spot gold rose 0.36% to US22021.62/ounce; COMEX gold main contract rose 0.54% to US22035.8/ounce; the US dollar index fell 0.05% to 101.478.
The U.S. core CPI annual rate for March announced on Wednesday (April 12) was in line with the expected value of 5.6%, which was 0.1 percentage points higher than the previous value; however, the overall CPI annual rate in March fell to a new low of 5.0% since May 2021, and it was 0.2 percentage points lower than the expected value.
Sarah House, a senior economist at Wells Fargo in Charlotte, North Carolina, said: “Inflation is still too high. Of course the Fed doesn't like it, but there are forward-looking signs that inflation will slow further in the coming months.”
Although the core inflation rate is still more than twice the Fed's 2% target, U.S. President Joe Biden said that the sharp slowdown in the annual rate of overall inflation means that “hardworking Americans have more breathing room.”
Richmond Fed Chairman Barkin said on Wednesday that the Fed still has more work to do in reducing inflation to its target of 2%, because the latest price pressure data is not weak enough.But San Francisco Fed Chairman Daley pointed out that tighter credit conditions may require a pause in interest rate increases.
Also released overnight were the minutes of the Federal Reserve's March meeting, which showed that several policymakers considered suspending interest rate increases after predicting that banking pressures would plunge the economy into recession.The latest data from CME's “Fed Watch” tool show that the market expects the possibility of the Fed raising interest rates by 25 basis points in May to be 65.9%, and it will start to cut interest rates in July.
UBS economists expect: "In the short term, gold prices may remain sensitive to changes in investor risk sentiment and interest rate expectations.But we believe that in the coming quarters, gold's rally has yet to be further developed.First of all, due to the continued uncertainty about the outlook for economic growth, further safe-haven capital flows may occur.Secondly, we believe that the US dollar looks set to weaken further... The downside risk of the US dollar has risen as the currency market bets on the Fed's interest rate cut."
Economists at the Austrian First Savings Bank expect: "Real yields will remain negative in the second quarter of 2023.This is conducive to the increase in gold prices.After very strong growth in the first quarter, gold prices should only rise modestly in the second quarter.We expect the price to rise to about 2080 in the second quarter."
It should be reminded that although gold is still relatively strong as a whole, there will be fluctuations in the middle, and it must be considered in many aspects in trading. If you have anything unclear, you can leave a message below
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Continue to be bullish unchanged
