Central banks raise interest rates are expected to become a stumbling block to gold prices

Last week, the price of gold rose first, then the growing tensions in the Middle East, the increased possibility of Portugal’s application for assistance, the unrelenting fears of the Japanese nuclear crisis, and the fact that international oil prices hovered near a two-and-a-half year high also deepened investors’ perceptions of global inflation. Concerns over the situation, driven by a variety of favorable factors, the price of gold continued to climb in the first half of last week and once set a record high of US$1,475.50. However, the rate hike measures that central banks may take in an inflationary environment and the Fed may withdraw from quantitative easing The market speculation of monetary policy also casts a shadow on the prospect of gold prices. The profit-taking market has caused gold prices to retreat after setting a record high. The highest price of gold last week was $1447.5 per ounce, and the lowest was $1417 per ounce. It closed at $1428.8 per ounce, a slight rebound of $10.1 from the previous Friday's $1418.7 per ounce, and the week-on-year increase of 0.71%. The weekly K-line graph showed an extension. The five-week moving average rebounded slightly upwards and led to the inverted hammer-shaped small Yangxian. Last week, the highest price of hardware was 1437.9 US dollars per ounce, the lowest 1422.3 US dollars per ounce, to close at 1428.8 US dollars / ounce, slightly lower than the previous trading day of 1.8 US dollars, an increase of 0.13%, the Japanese K line shows a delay 5 day moving average The long-term decline of the long-term Yinxian line continued.

The data released by the U.S. Department of Commerce last Friday (March 25th) showed that the growth rate of gross domestic product (GDP) in the United States at the end of 2010 has accelerated, as export and consumer spending growth has been stable, and corporate profits have maintained strong growth. A report released by the University of Michigan on Friday (March 25) showed that consumer confidence in the US remained weak in March and inflation expectations remained high.

The Atlanta Fed's Lockhart said on Friday (March 25) that if there is more evidence that the Fed’s low inflation target is being challenged, it will vote to support the change in ultra-loose monetary policy. At the same time, Lockhart pointed out that due to the strong growth of emerging markets and the geopolitical crisis in the Middle East, food and oil prices have soared recently, leading to an unacceptable increase in overall inflation. However, Lockhart said that after removing the impact of food and oil prices, the increase in core inflation was only slightly higher than expected. He added that the recent upward trend in short-term inflation indicators will not continue. The current low inflation target is no risk. The recent decline in the unemployment rate is not all a good thing, indicating that discouraged people leave the workforce.

The US Federal Reserve Bank of Philadelphia, Prosso, said on Friday that when the time came for the Fed, the Federal Reserve must use all effective measures to tighten monetary policy. He said that the Fed will have to tighten monetary policy in the near future and withdraw from the large-scale easing measures previously implemented. The U.S. economy has gained significant strength and momentum since the summer of 2010 and appears to be moving forward on a more solid basis.

The United States Chicago Fed ** Evans said on Friday that the US economy is currently in a recovery phase and may no longer need further support measures from the Federal Reserve (FED).

Concerned about this week's important data and events, Monday's US personal consumption expenditure price index in February, the United States February NAR seasonally adjusted home sales index, the United States March Dallas Fed manufacturing output index; Wednesday, the United States in March Changes in ADP employment; Thursday's German adjusted unemployment rate in the March quarter, March’s reconciliation of the consumer price index in March; Friday’s unemployment rate in the Eurozone in February, the US’s March non-farm payroll change in the March quarter, and the United States Unemployment rate in March, US March ISM manufacturing purchasing managers index.

Since the multinational coalition airstrike on Libya, international commodity prices have risen sharply recently. The price of gold hit a record high of 1,447.50 US dollars on Thursday, and the price of NYMEX crude oil has remained at a high of around US$106 recently. Continued strong gold prices also stimulated some investors to take high profits. The gold price hit a lot of selling pressure after setting a record high, and some investors quickly left the market after seeing the price of gold surging. The ever-increasing market speculation that the Fed may end its quantitative monetary easing policy ahead of schedule has also given strong support to the dollar, which has brought a huge negative impact on the price of gold. In a climate of rampant inflation, the central bank’s possible interest rate hikes will also cast a shadow on the outlook for gold prices.

However, the current uncertain market structure will continue to provide a solid and stable support to the gold price. Under the support of a series of favorable factors such as the unsolved debt in the Eurozone, the continuing tension in the Middle East, and the recovery of the sentiment of the Japanese investors, the overall price of gold will continue to be maintained. In a strong situation, the short-term adjustment of gold prices may be an expedient measure. Entering this week, the market will focus on the US non-farm employment report in March. In addition, the situation in the Middle East and North Africa should continue to receive attention. In part because some investors are worried that the European Central Bank will raise interest rates and China will further tighten its monetary policy, the price of gold may be temporarily consolidating this week. After Japan's reconstruction, it must be purchased externally. Given that Japan itself is a resource-poor country, the country’s demand for resource products will certainly rise sharply. In the coming period, Japan’s large purchases will inevitably further increase the supply of crude oil, grain, gold, and copper. Commodities bring lasting strong buying support. In addition, the difficult geopolitical crisis in the Middle East will continue to provide hedging support for gold and silver, paving the way for the conflict to break the $1,500 mark.