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Weekly Summary (15/11/2021)

High inflation triggered gold prices rise, Federal Reserve has no plan to raise interest rates

The highest price of gold rose to 1868 in last week which supported by sustained high inflation. At the same time, the US dollar index also continued to be strong , the expectations of the Bank of England and the Federal Reserve to raise interest rates increased which may become the driving force driving the decline of gold prices.

In October, CPI data rose sharply which is the largest increase in 30 years. Food, housing rent and other prices rose significantly. Current market pricing shows that the Fed is expected to raise interest rates for the first time before July next year and again before December. According to the fedwatch data of the Chicago Mercantile Exchange (CME), the possibility of raising interest rates was 50% at that time, which compared with less than 30% a month ago. The higher than expected US inflation data warmed up the Fed's expectation of raising interest rates in advance and the US index broke the 95 mark.

The Fed has said that it is unwilling to raise interest rates until more people who have lost their jobs due to the epidemic return to work, even if the inflation rate is higher than its official target of 2% for "some time".
Even if the inflation increase is so huge, the Fed generally holds very cautious remarks about raising interest rates. San Francisco Fed chairman Daley said on Tuesday that the real situation of the labor market and inflation outlook will not be clear until mid-2022, and urged patience in policy during this period. She said that because of the great uncertainty in the labour market situation and COVID-19 still behind the arch criminal of the current inflation, the best way is to "keep the boat steady" and remain vigilant.

Gold prices may continue to fluctuate at a high position in the early part of this week. We need to pay attention to the comments of the Federal Reserve on raising interest rates and the dynamics of major financial institutions such as the Bank of England. At the same time, focus on the structure of continuous breakthrough in terms of technology.

Technical analysis::

Last week the price mainly showed an upward trend. At the initial stage, due to the influence of fundamentals the price showed an obvious rapid and high-range rise, reaching the highest position in 1868, then fluctuated downward, reaching the lowest position in 1844. On the whole, it was still in a high shock and maintained a high range.

Since the opening of the brin belt at the beginning of last week, the track line is relatively rugged, indicating that the market is divided greatly, the closing at the weekend is smaller, and the market enters low liquidity.

MACD fast and slow line shows that although the market price is at a high level, the correction is large and the price is unstable. In the later stage, it crosses the zero axis and enters next week, but it recovers quickly. The closing period has recovered above the zero axis and showing an upward trend.

Important information this week::

Tuesday: 21:30 US retail sales rate in October (%)
Thursday: 21:30 initial jobless claims in the United States for the week ended November 13 (10000)

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