Everbright Futures: Gold prices may fluctuate in the short term, pay attention to the implementation of core PCE

Last week, COMEX gold prices fell 0.55% to $2,042.80 per ounce, and the main contract of Shanghai Gold fell 0.46% to 565.94 yuan per gram.

At the beginning of last week, driven by optimistic expectations of interest rate cuts, Shanghai Gold fluctuated and strengthened, reaching a high of 585.84 points. Later, with the unexpected rebound of a number of economic data, such as the monthly rate of retail sales and the monthly rate of industrial output, the probability of interest rate cuts in September was adjusted from the high level, the US dollar index fluctuated and strengthened, and the gold price fell significantly in the second half of the week.

According to the data of the Federal Reserve's interest rate observer, the current market forecast of a 25 basis point interest rate cut in September is above 90%, and the market may have fully priced in the positive impact of the September interest rate cut. Therefore, once inflation becomes sticky, the job market unexpectedly picks up, and economic operation data unexpectedly rebounds, the cooling of interest rate cut expectations will easily lead to pressure on gold prices. It is worth noting that last week, the IMF lowered its forecast for the US economic growth rate in 2024, and the Federal Reserve Beige Book also held a relatively negative attitude towards the US growth forecast for the next six months. In addition, although most of the economic data last week showed a recovery, the weakening of unemployment rate, GDP growth forecast and other data may indicate that the weak operating momentum of the US economy still exists. In this context, maintaining high interest rates may itself be a kind of tightening, and the market is quite confident that the pace of interest rate cuts will accelerate. Therefore, even if the probability of a rate cut in September falls, the decline is expected to be limited.

Looking forward to the market, supported by optimistic expectations for rate cuts, gold prices may fluctuate in the short term. This week, Federal Reserve officials are in a silent period. The short-term disturbance factors of gold prices may mainly come from economic data, the US election and geopolitical conflicts in the Middle East. Pay attention to changes in related market conditions. In addition, the inflation index favored by the Federal Reserve will be released on Friday this week. If the core PCE unexpectedly rebounds, it is necessary to be vigilant about the impact of changes in capital sentiment on the trend of gold prices.