Gold prices have calmed down as investors analyze better-than-expected Chinese economic data and consider what’s next for inflation and monetary policy. cryptocoin.com As we reported, gold prices were trading around $1,863, down 0.07% daily at press time, after rising 2.6% last week.
Gold prices soared as demand for the traditional port rose, according to analysts.
Bullion prices finished last week at the highest level since June as accelerating price pressures rattled bond markets and boosted demand for the traditional port, according to Bloomberg analysts. Meanwhile, Treasury yields weakened on Monday as investors expect Federal Reserve officials and other central bankers to make public appearances in the coming days.
In China, a range of data on everything from industrial production to retail sales shows that the country’s economy is stabilizing as spending improves and power supply increases. Analysts say this may ease concerns of an impending slowdown that could dampen global economic growth.
Morgan Stanley strategists: We see risks shifting towards our bullish position in the short term
However, the expected statements from Fed policymakers will feed the debate over whether this year’s price increases are a temporary phenomenon that does not require the bank to change course. New York Fed President John Williams, a famous dove, will speak on Wednesday. This week’s agenda includes the speeches of the heads of the central banks of Europe, England and Australia.
Analysts say the gold price benefits from rising inflation combined with the perception that the Fed will keep rates low to return to full employment. Bond market prospects for the next decade of inflation are at their highest since 2006, helping keep real Treasury yields in check, according to analysts. Morgan Stanley strategists, including Amy Sergeant, comment in a note:
With the latest moves, real yields look solid in the driver’s seat. If inflation remains high and real yields are under pressure, we see that risks shift towards our bullish position in the short term.
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