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On September 17th, Robert Sorkin, chief U.S. economist at PGIM, stated that the latest Federal Reserve meeting signaled that the Fed could implement three rate hikes, or even more if necessary, with just a slight push. This rate hike was hawkish, signaling another rate hike this year. Of the 18 Fed officials who submitted forecasts, eight expect three rate hikes in this cycle by the end of 2027. In a report, Sorkin noted that Fed Chairman Warshs mention of the Fed "withdrawing some easing measures" suggested that he and other participants viewed Wednesdays action as merely a small step towards tightening financial conditions, implying further action is possible. Sorkin added that the risk of further Fed rate hikes remains high if inflation continues to be high.On September 17th, Futures News reported that Zhang Guoqing, member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, stated in his concluding remarks that it is essential to thoroughly study and implement the spirit of General Secretary Xi Jinpings important instructions and the requirements of Premier Li Qiangs speech, and to earnestly enhance the sense of urgency, responsibility, and mission in developing advanced manufacturing. He emphasized the need to focus on key areas and crucial aspects, deeply implement the high-quality development action plan for key industrial chains, vigorously develop next-generation intelligent manufacturing, accelerate the upgrading and integrated development of the industrial system, and solidly promote the implementation of various tasks. He also stressed the importance of better leveraging the role of market mechanisms, accelerating the construction of a high-quality standard system, continuously rectifying disorderly and irrational competition, actively helping enterprises solve practical difficulties, and striving to create a favorable ecosystem for the development of advanced manufacturing.On September 17, the Pakistani Foreign Ministry issued a statement on the evening of the 16th, saying that Pakistan summoned the Chargé dAffaires ad interim of the Indian High Commission in Pakistan that day to lodge a strong protest against the "highly provocative and unacceptable behavior" taken by an Indian Navy vessel in Pakistans Exclusive Economic Zone on the 15th. The statement said that during the Pakistani Navys biennial routine exercises, the Indian warship took provocative actions at extremely close range towards a Pakistani warship, resulting in a contact between the two vessels. This action seriously violated the relevant agreements signed by both sides and could escalate regional tensions. The statement urged India to strictly abide by international law and bilateral agreements, especially those aimed at preventing maritime conflicts. The Chargé dAffaires ad interim of the Pakistani High Commission in India will lodge the same protest with the Indian Ministry of External Affairs.Japanese Finance Minister Satsuki Katayama: No comment on the Bank of Japans policy.Japanese Finance Minister Satsuki Katayama: The Bank of Japan is expected to work closely with the government to implement appropriate monetary policy in order to achieve the 2% price target.

The investment bank's words: Central banks cannot withdraw from unorthodox monetary policy, and the price of gold will rise to $5,500!

Oct 26, 2021 10:58

The Fed may plan to reduce the size of monthly bond purchases before the end of the year, which continues to put pressure on gold, which is still trading at around US$1,760 per ounce. However, Jefferies Group believes that in the long run, gold prices will continue to rise by thousands of dollars.



In a report released on Tuesday, Jefferies stated that gold and Bitcoin are still essential hedging tools because the threat of stagflation (a low-growth, high-inflation environment) continues to grow.

Although the market is still struggling recently, Jefferies analysts said they insisted on their long-term forecast of gold prices rising to $5,500 . However, they also acknowledged that gold will remain vulnerable to tightening concerns in the short term.

Jefferies is still bullish on gold because central banks have found that it is easier to implement unorthodox monetary policy than to withdraw from monetary policy.

Jefferies analysts said: “G7 central banks, including the most important Fed, will not be able to withdraw from unconventional monetary policy in a benign way, and will eventually continue to work on the expansion of the central bank’s balance sheet in some form. These The policy will make those central banks that pursue unconventional monetary policies increasingly lose their credibility and threaten the stability and integrity of the current legal tender system."

In addition to gold, the company also believes that with the devaluation of fiat currencies, the price of Bitcoin is likely to rise . The company's global portfolio of long-term global investors in U.S. dollars holds 5% of cryptocurrencies.

These analysts said: "The reason for the introduction of Bitcoin is that with the increasing evidence of the G7 currency devaluation policy, Bitcoin is clearly a legitimate choice to avoid risk capital seeking a store of value. It should be emphasized again. , Investments in gold and bitcoin are seen as insurance measures, not short-term transactions. This is a long-term investment portfolio that seeks to balance long-term risks and opportunities in the current global context."



Spot gold daily chart

GMT+8 At 9:08 on October 6, spot gold was quoted at US$1758.52 per ounce.

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