SMM6, March 2: since May, precious metals have recorded the biggest rebound this year, of which Comex gold soared from 1768 to 1909.5, a monthly increase of 8.02%. Shanghai gold rose 6.57% monthly, closing at 394.38 at the end of the month, the highest level since early January.
"check the trend of metal futures.
The continued rebound in gold prices in May was driven by a number of factors, one of which was the Fed's release of water that made the financial system liquid and inflationary. According to the US Department of Commerce, the US PCE price index rose 3.6 per cent in April from a year earlier, exceeding expectations by 3.5 per cent and up sharply from 2.3 per cent, the fastest pace since 2008 and well above the Fed's official inflation target of 2 per cent.
At the same time, a weaker dollar is another potential driver of gold's rally. Since May, the dollar index has been falling from 91.436 at the beginning of the month, hitting a low of 89.533 at the end of the month. It hit a new low since January 6 this year.
The inflow of encrypted currency funds into the precious metal market also supports the price of gold to a certain extent. Digital currencies generally fell in May, with Bitcoin falling about 37 per cent in May and about 43 per cent from its peak of $64829 in mid-April, driven by the outlook for global government regulation. Investors said this month's decline in Bitcoin was the biggest monthly drop on record and a record high.
In addition, gold ETF positions continued to increase. (ETF) SPDR Gold Trust, the world's largest gold listed trading fund, had a net inflow of more than 27 tonnes of gold holdings in May. Demand from ETF investors remains high for bullish gold.
Looking ahead, the final PMI value of the overnight US Markit manufacturing industry in May was 62.1, the highest since records began in May 2007. Strong manufacturing data pushed US 10-year Treasury yields above 1.61 per cent, as the Fed may adjust monetary policy ahead of time, and precious metals face new challenges. For the future trend of precious metals, the industry has different views:
Huizhou Merchants Futures from Shan Shan believes that gold is supported by rising inflation, lower dollar index and lower US bond yields, superimposed geopolitical conflicts. In the medium to long term, the Fed is likely to adjust the direction of monetary policy, the rise in US bond yields and the dollar index will strongly suppress precious metals, and continue to pay attention to the Fed's monetary policy and geopolitical conflicts.
There is growing evidence that economic momentum has peaked, raising the risk that inflationary funds flowing into gold may start to dry up, according to TD Securities. However, if inflation is indeed temporary, then ultra-loose monetary policy is likely to continue for a long time, suggesting that the market pricing the Fed rate hike is too hawkish, and gold prices could eventually strengthen further.
Analysts at IG Market said the short-term outlook for gold depended on the development of global inflation data and how major central banks, especially the Federal Reserve, responded. This week's focus will be on US jobs data released on Friday.
