During the day, gold fell slightly after rising to $1738.65 an ounce, its highest level since March 25, and is now trading at $1730. Recent US economic data were better than expected, boosting expectations of stronger inflation, but the rebound in the dollar index and US bond yields limited gold's rally.
Spot gold opened at $1727.80 an ounce on Tuesday. As of press time, spot gold temporarily recorded $1732.78 an ounce, an increase of 0.27%.
Market review
[spot gold] within days, gold fluctuated in a narrow range around $1730. At present, U. S. bond yields and the dollar are still important factors affecting the trend of gold. Gold fell to around $1677 at one point earlier last week as US bond yields and the dollar strengthened steadily, then regained its losses and returned to around $1730.
[foreign exchange] the US dollar index fell back below the 93 mark. The non-farm performance also boosted the dollar index. However, the US stock market rose to an all-time high as the US service sector PMI performed well in March. The dollar index came under heavy pressure yesterday, falling below the 93 mark. The euro regained its previously lost ground. Last week, France, Italy and other countries announced the blockade measures, which once made the euro against the dollar narrowly break the 1.17 mark. However, the dollar has come under pressure in recent days, supporting the pair back above 1.18. The pound fluctuated higher. The UK took the lead in the vaccination process, keeping the pound at the top, breaking the 1.39 mark.
[crude oil] US oil ushered in a sharp fall. Recently, the fluctuation of American oil is more violent, and it plummeted sharply yesterday.
The US Senate has ruled that more stimulus packages will be launched this year.
According to foreign media reports, the US Senate has ruled that the budget reconciliation process will be used again this year, opening the way for more stimulus packages to be launched this year, that is to say, it will be easier for US President Joe Biden to get rid of the Republican Party in the future.
A spokesman for U.S. Senate Democratic leader Schumer (Chuck Schumer) said in a statement on Monday that senior U.S. Senate member Elizabeth MacDonough commented that the revised budget resolution may include a budget legislation consultation (reconciliation) directive.
Elizabeth MacDonough is the independent arbitrator in the Senate responsible for interpreting the rules of procedure. Some foreign media described her as the one who most influenced Biden's policy prospects. Because she will decide which laws can be passed or repealed using the budget reconciliation process (simple majority), which will affect the policy prospects of Democrats. All the news media described her as a "powerful procedural traffic policeman" on Capitol Hill.
Spokesman Justin Goodman said: "Elizabeth MacDonough's opinion is an important step forward and a key channel for Democrats when necessary." If Republicans continue to set obstacles, the latest ruling will allow Democrats to use additional tools to improve the lives of the American people. "
He said it has not yet been decided whether the Democratic Party will use this program tool. The tool allows legislation to be passed by a simple majority without having to meet the usual 60-vote threshold in the Senate. Biden's $1.9 trillion epidemic relief plan was approved using the budget reconciliation process.
However, while the reconciliation process will enable Democrats to avoid obstruction in the Senate, it does not mean that the stimulus package will be passed 100%. On the one hand, the use of reconciliation procedures may limit the amount of money lawmakers can approve the stimulus package. On the other hand, we should also guard against the defection of Democratic Party members.
Chairman of the Cleveland Federal Reserve: the Federal Reserve should adhere to a loose monetary policy.
The dollar index fell to an one-and-a-half-week low of 92.527 and Treasury yields also weakened, reducing the opportunity cost of holding gold, a non-yield asset. However, the data showed that the US service sector index surged to an all-time high in March, and the overnight US stock market Dow and S & P 500 both set new all-time highs, suppressing the charm of safe-haven gold.
Ms Yellen, the US Treasury secretary, said she was working with the Group of 20 countries to agree on the world's lowest corporate tax rate.
Us President Joe Biden on Monday defended his proposal to raise corporate taxes to finance a big increase in US infrastructure spending, saying he was not at all worried that raising tax rates would hurt the economy. and there is no evidence that his proposal to raise corporate taxes will cause companies to leave the United States.
Cleveland Fed Chairman Mestre said the U. S. economic outlook is becoming bright, and said the Fed should adhere to loose monetary policy to help further support growth.
Mestre said expanded vaccination coverage, pent-up consumer demand, and fiscal and monetary policies have helped boost activity. A more optimistic outlook does not mean the Fed should start tightening policy as soon as possible, she added.
Mr Mestre said inflation was unlikely to be sustained and that there might not be a price surge in the US. In addition, Mestre is not worried about the recent rise in Treasury yields, saying the market rally is orderly.
"I think we need to be deliberately patient with monetary policy and to really focus on achieving monetary policy goals, I think there will be a very strong performance in the second half of the year, but we are still a long way from achieving our policy goals," Mestre said. "
Analyst Moya said traders will keep a close eye on the minutes of the Fed's March meeting released on Wednesday, which may indicate whether the Fed has considered withdrawing its aid.
The Fed's loose monetary policy will help gold prices rise.
Institutional point of view: it's hard for gold prices to fall any more. it's a good opportunity to buy gold.
The gold market continued to fluctuate slightly around $1730 an ounce, with neither upside nor downside breaking through.
Ronald-Peter Stoeferle, an Incrementum AG fund manager, said that now might be a good time to increase gold holdings in the portfolio, and the price of gold is unlikely to fall any more.
"the performance of gold is in line with its characteristics. At a time when the market is worried about the epidemic, there is a great demand for gold, but as the economy recovers, gold becomes less attractive and no one wants to buy gold."
But on the other hand, from the perspective of reverse investment, this is a good opportunity for gold.
Stoeferle believes that despite some resistance to the upside of the gold market, such as higher bond yields, positive expectations of an economic recovery and even a surge in bitcoin prices, gold prices are still showing a more stubborn performance.
There has been a correction in gold prices, but I have no doubt about the long-term bull market in gold.
Gold prices fell sharply early last week, testing support of $1680 an ounce at one point, but have since rebounded strongly.
While Treasury yields continue to rise, the bond sell-off is not sustainable.
"A lot of money has entered the financial markets and the global deficit is increasing, so it is impossible to afford high interest rates. The financial system is too fragile to afford high real interest rates. "
In addition, the market will continue to pay attention to the Fed's loose monetary policy. Once it gives the signal of tightening, then the market will react, and there may be a large correction for U. S. stocks.
