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International Gold Prices Rise, Investors Aggravate Inflation Concerns

Summary

On Monday (October 18), the U.S. dollar index was basically flat compared to the previous trading day. The S&P 500 index continued its gains last week. Investors also temporarily ignored energy shortages and supply chain tensions. COMEX gold futures prices fell for the second consecutive trading day, and stronger US bond yields put pressure on gold prices. Oil prices have fallen from multi-year highs, and US industrial production fell in September, cooling the earlier enthusiasm for demand. Domestic coal futures continued to be strong, with thermal coal soaring by nearly 9% in the night trading, and coke rising by more than 5%, both hitting a record high during the session.

In terms of commodities closing, COMEX December gold futures closed down about 0.2% to US$1,765.70 per ounce; WTI November crude oil futures closed up US$0.16, or 0.19%, to US$82.44 per barrel; Brent’s December crude oil futures closed down. 0.53 US dollars, down 0.62%, reported 84.33 US dollars / barrel; NYMEX November natural gas futures closed down 7.78%, reported 4.9890 US dollars / million British thermal units.


On Tuesday (October 19), international gold prices rose, and the weakening of the US dollar and US Treasury yields provided some support. More and more investors have begun to worry about stagflation in recent months, even as central banks are moving in the direction of reducing economic stimulus measures.


The US dollar index recorded a new low of 93.585 since September 28, which makes gold cheaper for holders of other currencies; the yield on the U.S. benchmark 10-year Treasury bond has also fallen, reducing the opportunity cost of holding gold as a non-interest-bearing asset.


Nicholas Frappell, global general manager of ABC Bullion, said: “Although gold fluctuates within a range, if it stays above US$1,760, it may rise to US$1782, or even US$1,800.” But he added that if the price of gold falls below 1759 The US dollar may be pushed down to 1737-1741 US dollars. Frappell also pointed out that the central bank’s gradual reduction of stimulus measures is just "common sense of life", "people do not have a good reason to go long gold, for example, macro investors do not seem to be persuaded to buy more gold to hedge against inflation."


The Governor of the Bank of England Bailey said on Sunday (October 17) that as the risk of inflation rises, the Bank of England is preparing to raise interest rates. He still believes that the recent jump in inflation will be temporary, but soaring energy prices will push up inflation and make the rise last longer, thereby increasing the risk of rising inflation expectations.


Risk Warning: The above content is for reference only, and does not represent JRFX’s position. JRFX does not assume any form of loss caused by any trading carried out in accordance with this article. Please consult your financial planner for your investment portfolios and manage your own risk.


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