The situation in the West continues to be unstable, and the gold price have steadily increased

​​

Euro zone inflation hit a record high in March as energy costs soared. Potential price pressures are also building, likely due to disruptions in global supply chains and the transmission of higher commodity prices. That could further fuel the ECB's concerns about the outlook for inflation; headline inflation in the euro zone jumped to 7.4% in March, just below the initial reading of 7.5%. Detailed data released along with the final CPI for March confirmed that energy inflation contributed 4.4 percentage points to the data. Road fuel costs and housing energy bills have soared. In March, they rose 38.9% and 47.6%, respectively, from a year earlier.

​​

​​

San Francisco Fed President Daly said on Wednesday (April 20) that she sees the Fed's case for raising interest rates by 0.5 percentage points next month as "complete" and "solid." The Fed's path to rate hikes this year is widely seen as appropriate in the face of high inflation. "My outlook is for the U.S. economy to have a soft landing, slowing to below trend growth, but not a recession," Daly told reporters, adding that even a recession would be short and mild, she added. , not enough to disrupt the long-term expansion of the economy. The annual rate of U.S. inflation in March hit a record high of 8.5% since 1981, the unemployment rate fell to a two-year low of 3.6%, and job vacancies were close to an all-time high. Daly also said that raising interest rates would not only help reduce excessive inflation, but also help burst what she called a labor market "bubble."

​​

​​

UBS believes that gold is well supported around current levels, at least until U.S. inflation falls or geopolitical risks ease. The bank expects gold to reach $1,950 an ounce by the end of June. Against the backdrop of geopolitical and inflationary risks, investors should be long gold for insurance purposes, but in the medium term, there are reasons to manage downside risks. Currently, UBS's model estimates the fair value of gold at around $1,500 an ounce.

​​

​​

It is "too early" to tell how much interest rates will ultimately need to rise. As the Fed raises interest rates, it will be necessary to assess the economic impact of tightening U.S. monetary policy, the Russian-Ukrainian war, and supply chain conditions. The Fed should raise interest rates wisely and wait to see if the idiosyncratic factors driving inflation start to fade. Currently experiencing very high inflation, the Fed can and can make monetary policy adjustments wisely. If inflation remains high, further rate hikes are needed.

​​

​​

The International Monetary Fund has warned that there could be more selling as central banks try to fight rising inflation and reduce economic stimulus from the pandemic. Market participants were optimistic at the start of the year, expecting some growth momentum in the economy against the backdrop of easing coronavirus restrictions, which could boost stocks. However, since Russia's unprovoked invasion of Ukraine on February 24, the outlook has deteriorated with further shocks to supply chains and higher energy prices.

​​

​​

Mary Erdoes, head of asset and wealth management at JPMorgan, said that while helping clients deal with the fallout from the Russian-Ukrainian conflict, those factors that affected price stability were now "forgotten". In general, geopolitical issues won't have a long-term impact on the market, barring severe commodity disruptions like the oil crisis, which is one of the things that's happening right now. This would have a harder-to-quantify and more lasting impact than most geopolitical issues. Monetary policy will depend in part on how the conflict develops, with the number of rate hikes expected to vary from four to 10.

​​

​​

The instability of the situation in the West continues to provide the US dollar with a safe-haven demand; in addition, the Fed's strong interest rate hike expectations once again provide a buying order for the US dollar, for which the pound is also deeply suppressed. As for the policy adjustment of the Bank of England, the market especially hopes that the United Kingdom will raise interest rates by 50 basis points like New Zealand, Canada, and the United States, and increase the tightening measures. However, the recent soft interest rate hike by the Bank of England has to make us feel about the United Kingdom. Expectations of a 50 basis point rate hike by the central bank were reduced. Although it is said that the current inflation rate in the UK has reached 7%, it still depends on the statement made by the Governor of the Bank of England on Thursday. Bailey will make a choice for the next monetary policy. This will determine the pound's next trend choice.