On Friday, November 6, overnight London spot gold surged then pulled back, while SHFE gold rose 0.27%.
The Bank of England raised rates as expected, but the hawkish signal released by the decision exceeded some market expectations. Specifically, the benchmark rate was lifted by 25 basis points to 4.00%, the first hike since August 2023, and the vote was 9:0 in favor, far more hawkish than the market-expected 7:2. Meanwhile, hawkish comments from Federal Reserve officials added to the tone. Cleveland Fed President Hammack said Thursday in Zurich that U.S. inflation has been above the 2% target for nearly six years, with price pressures coming from both supply and demand sides, and that monetary policy "needs to shift to a restrictive stance." She clearly favored "more frequent, smaller" rate hikes rather than waiting for inflation pressure to build before acting aggressively. Richmond Fed President Barkin was even more direct: "Demand in the economy is solid," "profits remain strong," and "I don't expect inflation to accelerate, but right now I also don't see it coming down, so gradual rate hikes still seem reasonable to me."
In the short term, gold has entered the nonfarm payroll pricing window, with attention on the U.S. October nonfarm payrolls data to be released tonight at 21:30. Expectations are for 65,000 new jobs versus the previous 29,000, the unemployment rate expected to hold steady at 4.2%, and average hourly earnings expected at 0.3% month-on-month and 2.9% year-on-year, compared with the previous 0.1% and 3.0%.
The market is still trading the possible impact of sudden changes in the U.S. political landscape. Overnight, U.S. tech stocks, especially AI-related trades, retreated sharply, triggering a broad market selloff and a sudden tightening of market sentiment. Amid concerns that continued selling could affect liquidity, the gold market also showed caution. In addition, the market continues to watch the United States' actions in the Middle East over the past two months, and whether tensions can continue to ease remains uncertain, which is another source of market concern.
Overall, although gold has room for a rebound, it will not happen overnight. As mentioned before, from the perspective of Federal Reserve monetary policy, Warsh may gain greater support and space on Fed independence, and the upside of any rebound will also be somewhat limited.
Writer: Li Qi. Qualification: F3046227. Trading advisory qualification: Z0016145. Disclaimer: The information in this report is all from public sources. Our company makes no guarantee as to the accuracy, reliability, and completeness of such information, nor does it guarantee that the information and suggestions contained herein will not change. We have sought to make the report objective and fair, but the views, conclusions, and suggestions herein are for reference only and do not constitute any recommendation for any specific product or business or any basis or suggestion for operations in related instruments. Investors who make investment decisions based on this are solely responsible for their own profits and losses, and this is unrelated to our company and the author.
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