Spurred by the weakness of the dollar, gold and silver prices surged overnight, ending two consecutive sessions of decline, but Asian markets fell again in early trading today, with gold currently breathing around $1769.07 and silver fluctuating at $23.65. Concerns about global inflation, early interest rate hikes and economic slowdown continued to simmer, and the dollar's fall back to 93.790 also flashed positive factors, with high-profile buying caused by weakness in precious metals in October.
Higher Treasury yields result in higher mortgage rates. A forecast released by the mortgage bankers association predicts that the average interest rate on 30-year fixed mortgages will rise from about 3 per cent today to 4 per cent by the end of 2022. This will stimulate a 62 per cent drop in refinancing to just $860 billion. It deepens its projected decline of 14% in 2021 to $2.26 trillion.
Fed governor Waller (Christopher Waller) said that the Fed's curtailment of bond purchases (Taper) should be launched in November, and that there may be some time before interest rate hikes, and if high inflation persists into the end of the year, it could force the Fed to adopt a more aggressive policy response to control it.
Federal Reserve Governor Bowman (Michelle Bowman) said restrictions on women's participation in the labor market due to childcare after the outbreak, coupled with an increase in the number of retirees, could hinder the recovery of the job market and drag down the US economy.
Us Treasury Secretary Yellen (Janet Yellen) extended "unconventional measures" to December 3, the deadline for the debt ceiling, to keep the federal government well-funded, urging Congress to act because the short-term debt ceiling agreement passed last week was only a "temporary reprieve".
Kitco.com quoted analysts as saying that with growing inflationary pressures likely to force the Fed to start tightening monetary policy, safe-haven funds were hesitant to increase their gold holdings, which kept gold prices at about $1750 to $1800 an ounce without direction.
The TD Securities report said expectations that higher inflation could last longer are starting to affect asset prices, including the risk of stagnant inflation and concerns about the energy crisis, which will support precious metals prices, especially if the energy crisis lasts longer; however, the Fed's expectation of raising interest rates limits the extent of gold's rise.
Ricardo Evangelista, senior analyst at ActivTrades, said that from an inflation perspective, the strong dollar also acts as a safe haven because the Fed is expected to announce a reduction in bond purchases before the end of the year and may start raising interest rates in the second half of next year, while the strength of the dollar is putting pressure on gold prices.
Lukman Otunuga, a senior research analyst at FXTM, said precious metals could be affected by long-short forces as the market faces the prospect of tighter monetary policy and worries about weak economic growth and high inflation.
"if the dollar continues to weaken, gold is expected to re-challenge the $1800 level, with the key level of $1800 slightly above the 100-day and 200-day moving average," Otunuga said. Gold futures hit $1800 in intraday trading last Thursday, but have been slow to stabilize that level since mid-September. "
Palladium and platinum performed well on Tuesday, UBS analyst Giovanni Staunovo said: "as the market expects the chip shortage may have peaked, the auto industry, two important raw materials metal short covering phenomenon; if the data show that this is indeed the case, then car production is expected to improve."
Ole Hansen, head of commodity strategy at Saxo Bank, said the copper market had begun to attract interest from hedge funds and that copper prices had returned to $10000 a tonne last week, although the bullish copper positions held by hedge funds had rebounded recently, but they were still a long way from the record high of more than 80, 000 at the end of last year.
David Becker, an analyst at FXEmpire, said silver prices broke through on Tuesday and closed above trend line resistance. The dollar fell, but rebounded from its intraday lows in North American trading. Us bond yields are mixed, with 10-year yields rising and 2-year yields falling. Higher yields lead to higher mortgage rates, which may reduce refinancing of futures, according to the Mortgage Brokers Association.
The silver price breakthrough closed above the trend line resistance level consisting of a downward trend line of nearly $23.36, with additional support seen around the 50-day moving average of $23.27, with the target resistance at a September high of $24.82, Becker added. Due to the cross-buy signal generated by the MACD index, the momentum turned positive in the medium term. The MACD histogram is printed in the positive area, and the upward sloping track points to a higher price.
