1. Market review: Spot gold started an upward trend in the Asian session, reaching an intraday high of $1,886.53 at one point, but gave up all gains in the U.S. session and turned down, and finally closed up 0.07% to $1,875.46 per ounce; spot silver It once stood at the $24 mark during the day, then fell back and down with gold, and finally closed down 0.78% at $23.75 an ounce.

2. Collins, chairman of the Boston Fed, clearly stated that he is inclined to raise interest rates by 25 basis points in February, and he is inclined to raise interest rates to a level slightly above 5% this year. The Fed may raise interest rates three times in February, March and May 25 basis points, and then maintained until the end of 2023. It is worth noting that Collins is not a member of this year’s voting committee, but she will participate in the deliberations when the decision is made.

3. Barclays raised its forecast for first-quarter GDP in the United States (1) The forecast for first-quarter GDP in the United States was raised to 0.5% from the initial estimate of zero growth; (2) a mild economic recession is expected to begin in Q2 and continue into Q4; (3) The Federal Reserve is expected to reduce the target range of the target federal funds rate to 4.5%-4.75% by the end of 2023 and reach 3.0%-3.25% by the end of 2024.

4. On the 4th and 11th, the US Federal Aviation Administration system failed, and a large number of flights were grounded. As of around 22:00 Beijing time, the US Federal Aviation Administration lifted the take-off ban, and the cause of the system failure is still under investigation.

5. The U.S. government has extended the public health emergency of the new crown infection until April this year, which experts say may be the last time.

6. Dynamics of Russia-Ukraine Conflict
(1) The Russian Ministry of Defense reported on the 11th that the Russian army has controlled the town of Bodgorodnoye on the outskirts of Soledar in the direction of Donetsk. Soledar has been blocked from the north and south by the Russian Airborne Forces; (2) Ukrainian Deputy Defense Minister Mariar said on the evening of the 10th local time that Ukraine and Russia are still fighting fiercely in Soledar, and Russia has suffered heavy losses; (3) The Kremlin stated that Putin is willing to negotiate on the Ukraine issue; (4) The Russian Ministry of Defense stated that Defense Minister Shoigu has appointed Chief of General Staff Gerasimov as the commander-in-chief of Ukraine’s “special military operations”.


Morgan Stanley

How will CPI affect the Fed’s interest rate hike?
The monthly rate of core inflation is expected to be only slightly higher than last month’s downward surprise (the monthly rate is forecast to be 0.29%); energy prices, especially gasoline prices, have fallen again, which should push the overall CPI monthly rate to negative Value (-0.11% forecast); falling auto prices and moderating healthcare inflation will be key for this data. Confirmation of lower inflation pressures in December should allow the Fed to raise interest rates by 25 basis points at the February FOMC meeting, as we expected, and while last week’s non-farm payrolls data remained ostensibly strong, the easing of wage pressures did provide the Fed with room to further End the tightening cycle sooner than suggested in the December economic forecast. We expect a more pronounced slowdown in non-farm payrolls for the next two rounds ahead of the March FOMC meeting, so it may be appropriate for the Fed to pause its tightening cycle at the next meeting.

Saxo Bank

The risk of a short-term pullback in gold has increased
The market continued to focus on the progress of China’s reopening, while gold was generally stronger on the back of seasonal demand. Before the CPI data, the weakening of U.S. bond yields and the U.S. dollar supported gold, and the market expected that inflation data would continue to decline, which led to a further increase in expectations of a slowdown in the pace of interest rate hikes. Speculative buying and technical signals brought about by the current short-covering still support gold, but the performance of long-term funds on ETFs is still tepid, increasing the risk of short-term corrections. The next important resistance for gold is at $1,896, which is the 61.8% retracement of the 2022 decline, with support at $1,865 and $1,830.


Don’t get too hopeful for gold to extend its rally
Although the Fed still maintains an aggressive stance on monetary policy, the market is still pricing in expectations of declining inflation Gold investors may still face difficulties in the short term. Market expectations and the Fed’s message are still far apart, and if the market starts to buy into the Fed’s expectations for monetary policy, gold could see a little renewed selling pressure. Therefore, in our view, one cannot place too much hope on gold extending its rally. However, this has not changed our optimistic view on the fundamental outlook for gold. The Fed will start to cut interest rates after inflation has fallen sufficiently by the end of the year and the labor market has cooled. We expect gold to reach $1850 by the end of the year.

Jim Wyckoff, market analyst at kitco

Bulls still have the technical advantage
The February gold futures contract hit a seven-month high again. From a technical point of view, the bulls still have an advantage, and there has been a two-month upward trend on the daily line. The first resistance is at $1890.9, followed by $1900. The next goal of oil is to make gold break through and stabilize above $1900. The first support below is at $1869.3, followed by $1850. The short target is to make gold fall below $1800.


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