International spot gold came under renewed pressure on Thursday, hitting as low as $1719.04 an ounce as US bond yields climbed again and broke through the key 1.7 per cent barrier to help the dollar resume its rally. But this is not surprising, after all, although the Fed insists on a loose stance, it has not sent any substantial signal to control the problem of rising yields, and in the environment of economic recovery and massive fiscal stimulus, rising inflation is an inevitable trend, which makes it difficult for yields to stay low. It is worth noting that compared with the impact of the previous sharp rise in yields, the impact of the recent rise in yields on the market has been much milder, we can see that investor sentiment is also gradually adapting to the current new model.
Forexlive commented that today's surge is starting to scare risky assets, but as the Fed insists on low interest rates for a longer period of time, it may not take long for stocks to stabilize unless Treasuries fully surrender. This means that market sentiment is expected to return to stability soon.
In terms of economic data, the number of first-time claims for unemployment benefits in the United States rose 45000 month-on-month to 770000 last week. The previous week's figure was revised upwards to 725000 from 712000. The data was consolidated around 700000 to 800000, indicating that although the US stock market has recently reached an all-time high, the US job market has not yet fully recovered from the COVID-19 epidemic.
Analysts pointed out that the US data unexpectedly hit its highest level since mid-February last week, highlighting the intermittent nature of the labour market recovery. This shows that the job market is still struggling to cope with business failures and health problems. Even so, economists expect initial requests to fall in the coming weeks as states continue to ease restrictions after the latest $1.9 trillion stimulus package.
In terms of geopolitical risks, new changes have taken place in both China and the United States, as well as in the United States and Russia. The talks between senior Chinese and US officials came on Wednesday after the US imposed additional financial sanctions on 14 Chinese officials who had previously imposed travel restrictions, in an attempt to "retaliate" against China to improve Hong Kong's electoral system. The talks between senior officials of China and the United States will be held on the 18th and 19th local time. Commentators said the dialogue means that the world's two largest economies are trying to deal with a relationship that has fallen to a "freezing point" during the Trump administration.
At the same time, synthesizing the reports of CNN, ABC news, and other US media, when asked in an interview whether he thought Putin was a "killer," Biden gave an affirmative answer and said that Putin would "pay the price" for interfering in and sabotaging the 2020 US election. The Kremlin then said that Biden's comments on Putin were "very bad" and that there was no precedent. The Kremlin also said that Putin currently has no plans to meet with the Russian ambassador to Washington; the Russian ambassador to Washington has been recalled to Moscow for consultations and will analyze ways to handle relations with the United States in the near future.
From a technical point of view, the daily chart shows that gold broke through the key resistance of 1740 yesterday, but fell back to that level during the day, and a false breakthrough means that it faces reverse downside risks in the short term. If it falls further in the short term, the lower initial support will focus on 1720, and after falling below, further support will focus on the vicinity of 1700.
Deutsche Bank (Deutsche Bank) believes that there is room for gold to fall further and may even fall to the $1500 / oz level. "the performance of gold in the first quarter showed a huge impact on real interest rates. Although the rise in nominal interest rates was initially affected by inflation expectations, the steep bond yields in February and March are no longer limited to inflation. "
Sebastien Galy, senior macro strategist at Nordea Investment Funds SA, says the yield on 10-year Treasuries is likely to rise to 1.8 per cent in the short term. He also believes that the Fed has been on hold in the face of rising inflation expectations and strong economic performance in the medium term, allowing the Fed to quickly change from a dove to an eagle to catch up in the future.
