Gold trading alert: The Fed may raise interest rates by 125 points again during the year, the dollar continues to soar, gold prices want to explore new lows?

By    22 Sep,2022

Thursday (September 22) Asian session, spot gold shock weakness, approaching the overnight record low of nearly two and a half years 1653.73 position, currently trading at 1659.73 U.S. dollars / ounce, overnight the Federal Reserve as expected to raise interest rates 75 basis points, gold prices had a brief dip, but then appeared "boots on the ground" market, gold prices once Rebound to $ 1687.95 / oz. However, the rise in gold prices failed to last, the Federal Reserve issued a signal for further interest rate hikes, after Powell's speech, interest rate futures show that the Fed will also raise interest rates in the year 125 basis points, which means there is a 75 basis points and 50 basis points of interest rate hikes, the dollar index shock higher, constantly refreshing more than 20 years high, currently up to 111.73, so that gold prices retracted all the gains.


Although the Russian-Ukrainian geopolitical situation once also to provide support for gold prices, the market also has some low buying support, but with the dollar and U.S. bond earnings continue to rise, gold prices are still expected to have some downside risk in the short term.

This trading day focus on the Bank of Japan interest rate resolution, the Bank of England interest rate resolution, the U.S. initial jobless claims change, the geopolitical situation related news.

The main negative fundamentals

[Fed raises rates for the third time in a row by 75 basis points, Powell vows to be steadfast in fighting inflation

Federal Reserve Chairman Jerome Powell vowed Wednesday to "stay the course" in the fight against inflation until the pace of price increases slows significantly, after the Fed earlier announced its third consecutive 75 basis point rate hike and hinted at further rate hikes this year.

The latest batch of sobering forecasts show that the Fed is not only suggesting that the pace of interest rate hikes will be faster than expected, the terminal rate will be higher than expected, but also that economic growth will slow sharply and the unemployment rate will rise to levels that would only be seen in historical recessions.

Powell was outspoken about the future "pain", he mentioned the rising unemployment rate, and specifically pointed out that the housing market may need to "correct". The real estate market is a continuing source of rising consumer inflation.

Powell said, "We had a hot housing market ...... there is a very serious imbalance," "What we need is a better coordination of supply and demand ... ...probably the housing market will have to go through a correction to get back to that."