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On April 10, data released by the U.S. Bureau of Labor Statistics showed that the U.S. CPI rose by 3.5% year-on-year in March, an increase from 3.2% in February, higher than the market expectation of 3.4%, and the highest level since September 2023. US CPI rose 0.4% month-on-month in March, beating expectations of 0.3%. At the same time, core inflation, which excludes food and energy costs, which the Fed is more concerned about, also exceeded market expectations across the board. The Fed may cut interest rates or extend them again.
Media analysis pointed out that CPI, as a key indicator of inflation, has a significant impact on financial markets and Fed policy. Bob Prince, co-chief investment officer at Bridgewater Associates, said persistent inflation and a strong economy in the U.S. have "derailed" expectations for the Federal Reserve to cut interest rates this year. Goldman Sachs has once again revised its forecast for interest rate cuts in 2024: 3 to 2, June to July.
Affected by this news, the previously strong gold price fell sharply, COMEX gold dived, from $2360 to $2337.1 in intraday trading, falling more than 1%, and spot gold also fell to $2320 / ounce.
As of press time, COMEX gold edged up 0.17% at $2,352.6 an ounce. Some analysts believe that U.S. inflation exceeded expectations, U.S. Treasury yields rose, and the U.S. dollar climbed, restraining the rise of precious metals.
- Global gold supply
From the perspective of gold production, according to the statistics of the World Gold Council, global gold mine production continued to grow from 2015 to 2018, reaching a peak of 3,655.84 tons in 2018; From 2019 to 2020, gold mine production showed negative growth, partly affected by factors such as the epidemic, high mining costs, and the increasing difficulty of mining the remaining gold mines. Growth resumed again in 2021-2022, close to the previous peak, with global mine production of 3,627.72t in 2022. In the first half of 2023, global mine production totaled 1,780.5t.
- Global demand for gold
From the perspective of global gold consumption demand, the consumption of gold in mainland China fluctuated from 2015 to 2022. Gold demand in 2022 was the strongest growth in recent years, with global demand surging 18% to 4,740.7t, the fastest growth rate in recent years. Among them, the demand in the fourth quarter of 2022 increased significantly, which was the highest single-quarter demand in the past decade, thus contributing greatly to the high growth of demand in the whole year of 2022. In the first half of 2023, global gold demand reached a cumulative 2,460.1t.
- Global gold price trends
From the perspective of gold price trends, from 2017 to the first half of 2020, the global gold price showed a fluctuating growth trend, reaching a high of US$2,000 per ounce in July 2020. From 2021 to 2023, the global gold price fluctuated at a high level, reaching $2,045.4 per ounce in December 2023.
Huatai Securities Macro Research said in the latest research report that although the short-term gold price volatility has hit a record high or entered a volatile trend, it maintains a long-term optimistic view on gold allocation. The preliminary conclusion is that while the escalation of international issues has pushed up the prices of gold and oil, a series of factors, including the stabilization and rebound of the global industrial cycle, including the fact that domestic growth momentum is no longer weakening more than expected, may have some explanatory power for the recent asset price fluctuations.
Looking ahead, professionals expect that gold prices may still have room to rise. From the perspective of capital, the proportion of gold reserves of major gold buyers is still low, and there are still a large number of potential capital buyers who may enter the market at the right time in the future, or push gold prices into a new round of upward trend.
Note: This article is for content purposes only and does not constitute any investment advice.
Prospective Economist APP Information Group
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