Original title: the international gold price is almost certain to close down this week, but there is still a big variable for the Federal Reserve to turn the eagle.
On Friday, September 17, international gold prices rebounded, reversing more than 2.2% of the decline recorded in the previous session. However, the strength of the dollar makes it inevitable for gold prices to close lower this week, and investors are waiting for next week's Fed policy meeting.
16:28 Beijing time, spot gold rose 0.54 per cent to $1763.19 per ounce; COMEX gold futures rose 0.37 per cent to $1763.2 per ounce; and the dollar index fell 0.07 per cent to 92.802.
Gold overnight hit a low of $1745.40 an ounce since Aug. 12, down more than 1.4% so far this week; the dollar index
It is close to the overnight high of 92.965 since Aug. 27. The unexpected increase in US retail sales in August, announced overnight, raised expectations that the Fed might scale back its stimulus measures ahead of time.
A reduction in central bank stimulus tends to raise bond yields, raising the opportunity cost of holding gold. It also helps to boost the dollar and further depress the price of gold. The two-day policy meeting of the Federal Open Market Committee (FOMC) will be held from September 21 to 22.
Jeffrey Halley, senior Asia-Pacific market analyst at OANDA, said: "although so far, $1750 support has been defended and some speculative short covering has raised prices, the rebound looks weak and gold is likely to test $1750 again as the dollar continues to strengthen."
Federal Reserve Chairman Powell repeatedly stressed before that the rise in inflation in the United States is temporary because of the supply chain bottleneck caused by the epidemic. Most analysts also say the outlook for strong US economic growth next year has not changed much so far.
However, with the spread of the Delta epidemic, some parts of the United States have encountered serious economic resistance. Although President Joe Biden announced a policy requiring unvaccinated Americans to be vaccinated, the return of children to school and some companies' plans to return to the office are still likely to increase the risk of further spread of the epidemic.
Philip Marey, senior US strategist at Rabobank, said: "the main problem is that they have reached a plateau [in terms of vaccination] and it is difficult to improve further because some people do not want to be vaccinated at all. If the Delta (variant) causes more damage to the economy, we may see the official announcement postponed from November to December, or even January. "
The ECB is expected to reach its 2 per cent inflation target by 2025, according to Lane, chief economist of the ECB, at a private meeting with German economists, the Financial Times reported on Thursday. This suggests that the European Bank may raise interest rates earlier than expected, and also contributed to the short-term bullish sentiment in the gold market.