Everbright Futures: Short-term gold prices remain weak and volatile, pay attention to the Fed’s March interest rate decision

Last week, the price of COMEX gold fell by 1.23% to US$2,159.40 per ounce, and the Shanghai gold price rose by 0.37% to 508.16 yuan per gram.

Similar to January, the U.S. CPI and PPI data in February once again exceeded expectations and the road to falling inflation may become more bumpy. The monthly rate of U.S. industrial output in February also climbed higher than expected, recording 0.1%, and negative factors have once again increased. However, the data in March showed different characteristics. The one-year inflation expectation in the United States in March dropped from the expected value and was the same as the previous value, maintaining at 3%. The market's expectations for inflation showed signs of easing. The initial value of the University of Michigan's consumer confidence index in March and the New York Fed's manufacturing index also dropped from expected values. The economic decline may be glimpsed, and the support force below the gold price is strong.

This week, the Federal Reserve’s March interest rate decision will be implemented. Compared with specific interest rate arrangements, the market pays more attention to the distribution of the Fed's dot plot, hoping to see whether strong CPI and PPI data will cause Fed officials to change their stance on cutting interest rates this year, and whether expectations for three interest rate cuts this year need to be revised. Taken together, the higher-than-expected CPI and PPI increases last week have dampened market sentiment to a certain extent. The weekly trend of COMEX gold prices has been negative for the first time in four weeks. Before more news is released, the short-term gold price is expected to remain weak and volatile.