Weekly

March 1 ST

Today's volatility range:

After the gold price lost the psychological barrier of 1800, the yield of US 10-year treasury bonds rose, which triggered a global stock market crash and further dragged down the performance of gold prices. Although it is difficult to push up inflation in the current sluggish US labor market,

However, Biden's $1.9 trillion economic stimulus plan can stimulate inflation, and the US Federal Reserve officials will not allow the yield to rise excessively. If necessary, they will definitely take action, which will inevitably push down the real interest rate.

Gold is still promising in the medium and long term. Today, the gold price is expected to rebound, and the suggested volatility is between $1733 and $1753.

Last week, a small global stock market crash broke out, and Hong Kong had the honor to participate in it and become the driving force of the stock market crash. It was because Financial Secretary Chen Maobo announced in the budget on Wednesday that he was going to submit a bill.

It is planned to increase the stamp duty rate of shares from 0.1% to 0.13%. The news caused Beishui to flow out of Hong Kong immediately, and the market fell by about 3% today, which became the first decline in Asian stock markets and took the lead in driving stock markets in other regions to fall.

But in his message, Secretary Chen should never be complacent, thinking that he has the influence of turning his hands into clouds and covering water with rain, and that his policies can shake the whole world. Because the real cause of this mini-stock market crash was the sharp rise in US debt rates in the latter part of last week,

The price of 10-year US Treasury bonds fell, and the yield climbed to 1.6%, hitting a new high in one year, which caused the three major indexes of US stocks to plummet and dragged down the global stock market crash.

However, will the yield of US Treasury bonds continue at this level or even rise? This can be inspired by Federal Reserve Chairman Powell's attendance at the House Financial Services Committee last week, because he restated his position.

The US interest rate will remain low, and the Fed will continue to buy bonds to support the US economy. On the issue of raising interest rates, Powell also pointed out that the Fed must meet the following three conditions before raising interest rates:

1) the inflation rate has reached 2%; 2) It can be predicted that the inflation rate will remain stable at this level or higher; 3) All economic indicators can show that the employment market is at the maximum intensity.

Powell's speech has hinted that he does not want to see the real interest rate too high until the economy returns to normal level. Although the inflation rate is difficult to increase in the short term because the unemployment rate in the United States is still high, the only remaining tool is the nominal interest rate.

Referring to the operation in 2011 when the U.S. government implemented large-scale quantitative easing for the first time due to the collapse of Lehman Brothers and the financial tsunami in 2008,

The Federal Reserve has successfully intervened in the price and yield of treasury bonds without printing silver paper. They bought long-term treasury bonds in the market through Operation_Twist(OT), which is called Twisting Operation in English.

And the same amount of short-term treasury bonds were sold to control the yield of treasury bonds, which caused the rare phenomenon of upside-down treasury bonds in the market. Although the reason for the volume difference caused by COVID-19 this time is different from that in 2008,

However, in fact, officials of the Federal Reserve Bureau of the United States have never been vegetarian, and they will never look at all the newly printed silver papers, but only invest in the national debt. It can be estimated that they will not allow the yield to rise excessively, and they will definitely take action if necessary.

Of course, when the assets and liabilities of the United States are expanding, the liabilities will also increase. In order to convince other countries that the United States has the ability to bear debts, she will also hope that the US dollar will continue to dominate the world, which will inevitably crack down on potential competition.

Who is the first target? It goes without saying! The price of U.S. 10-year treasury bonds fell, and the yield climbed to 1.6%, hitting a new high in one year. The rising yield triggered a global stock market crash, which further dragged down the performance of gold prices.

The highest price of gold was $1,775 per ounce, and the lowest price in the US market fell to $1,717 per ounce, and finally closed at $1,734 per ounce, falling by $50 a week.

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