source: e company
what signal? The two major "wealth creation myths" that have skyrocketed recently - gold and Bitcoin - both fell.
On Friday, international gold prices fell slightly. This was the first time in nearly four weeks that gold recorded a weekly decline.
Bitcoin’s largest intraday drop exceeded 6%, and the price once fell below $65,000 per coin. In the past 24 hours, the virtual currency market has liquidated positions exceeding 3.9 billion yuan.
Worry about the postponement of the Federal Reserve's interest rate cut
Last Friday night, the spot gold price fluctuated around US$2,159.99 per ounce. The price of April gold, the most actively traded in the New York Mercantile Exchange gold futures market, fell by US$6 that day, closing at US$2,161.5 per ounce. The decrease was 0.28%.
This week, the latest data released showed that the producer price index (ppi) released by the US Department of Labor in February rose more than economists expected. In February, ppi increased by 1.6% year-on-year, and the growth rate was higher than the expected value of 1.2%. The previous value was revised from 0.9% to 1%. In February, ppi increased by 0.6% month-on-month, expected to be 0.30%, and the previous value was 0.30%.
Inflation as a whole faces the risk of rebounding, which has triggered market concerns about the Federal Reserve delaying interest rate cuts. Some institutions predict that the Federal Reserve may not start cutting interest rates until July, rather than June as previously expected.
Affected by changes in expectations for interest rate cuts, U.S. bond yields rose significantly this week, weakening the investment appeal of gold with no interest returns. The international gold price fell by 1.10% this week.
It is reported that the Federal Reserve will hold a monetary policy meeting from March 19th to 20th. The focus of the meeting will be the "dot plot" of the Federal Reserve's new interest rate hike path.
Economists at JPMorgan Chase lowered their forecast for the Fed's rate cuts for all of 2024 to 75 basis points. It was previously expected to cut interest rates by 125 basis points throughout the year.
Michael Feroli, chief U.S. economist at JPMorgan Chase, said in a note on Friday explaining the adjustment: "Absent economic weakness, we think the committee will take a slow approach, and we now expect 75 basis points of rate cuts this year, or from June. Start cutting interest rates by 25 basis points every other meeting."
As for the dot plot that will be updated next week, the bank believes that "there is more than a 50% chance that the median expectation this year will be two interest rate cuts of 25 basis points each in 2024, and December will show three interest rate cuts."
In addition, regional conflicts have eased recently.
According to Anadolu Agency’s report on March 17, local time, the Israeli delegation that is about to go to Qatar to participate in the ceasefire agreement negotiations in the Gaza Strip will not leave earlier than the 18th.
reported that the Israeli war cabinet will hold a meeting later on the 17th local time to discuss the Israeli delegation’s negotiating tasks and content.
The Israeli delegation will leave for Qatar only after the meeting.
There were previous media reports that David Bania, the head of the Israeli Intelligence and Secret Service (Mossad), will discuss the ceasefire agreement in the Gaza Strip with Qatari Prime Minister and Foreign Minister Mohammed and Egyptian officials in Doha, the capital of Qatar, on March 17. issues are discussed.
Bitcoin plummeted
html On March 17, the virtual currency market suddenly collapsed.The price of Bitcoin once fell below US$65,000 per coin, with the largest intraday drop exceeding 6%; the price of Ethereum once plummeted 9.77% in Japan.
According to coinglass data, in the past 24 hours, a total of 166,000 investors liquidated their positions in the virtual currency market, with the total liquidation amount reaching US$541 million (approximately RMB 3.9 billion).
On the eve of this round of plunge, the virtual currency market led by Bitcoin staged a crazy bull market. A large number of investors poured into the virtual currency market, and the price of Bitcoin continued to set new historical highs.
html On March 14, Bitcoin hit an all-time high, approaching US$74,000 per coin, a cumulative increase of over 70% compared to the beginning of this year. Indicators for the top 100 tokens (including ether, bnb, solana, etc.) have also increased by about 60%.Recently, JPMorgan Chase issued a report on Bitcoin, which attracted market attention. The
report states that the highly anticipated Bitcoin halving event will arrive in April, which may have a serious negative impact on the profitability of Bitcoin miners. The
report warned that the price of Bitcoin may plummet to $42,000 per coin as a result, a potential drop of more than 36% from the current price.The logic behind this prediction is explained in detail in the
report: First, the halving event will directly reduce the Bitcoin rewards received by miners, thereby reducing their income; secondly, due to the rising production costs of Bitcoin, those with high electricity costs and rigs will Inefficient miners will face greater pressure.
This may cause some miners to exit the market, further reducing the computing power of the Bitcoin network.
Despite this, there are still a large number of investors on Wall Street who are optimistic about the future of Bitcoin. Tony Sycamore, a market analyst at IG, said that although Bitcoin is overbought in the short term, this trend is far from over and the decline will be well supported. A move toward $80,000 is not impossible.
Tom Lee, one of the biggest bulls on Wall Street and former chief equity strategist of JPMorgan Chase, said in an interview: "I think Bitcoin will return straight to its long-term trend line, which may be $82,000 in the short term and may reach $150,000 by the end of the year. ."
Copper price increase has just begun?
Contrary to gold and Bitcoin, copper prices suddenly skyrocketed.
LME copper futures closed up US$184, or 2.07%, at US$9,072/ton last Friday, breaking through the closing level of US$9,012.50 on April 18, 2023, approaching the closing level of US$9,200.50 on February 21 of that year, with a cumulative increase of more than 5.73 US dollars this week. %.
Goldman Sachs analyst Nicholas Snowdon and others said in a latest metal industry report that the global manufacturing recovery cycle is gradually unfolding, indicating that bulk metal demand is expected to enter a new upward cycle. The
report believes that China's "dual carbon" policy continues to support the demand for raw materials related to the green economy, as well as the cost stimulus effect driven by the recovery of manufacturing in Europe. Metals such as copper and aluminum will gradually enter the supply and demand gap stage, and price performance can be expected.
analysts emphasized that recent data showed that the global manufacturing purchasing managers index (PMI) expanded for the first time since September 2022, indicating continued improvement in manufacturing activity.
Judging from historical data, after the global manufacturing cycle bottoms out, metal prices tend to continue to rise in the following 12 months, especially the average increases of 25% and 9% for copper and aluminum respectively.
Currently, inventory levels of most industrial metals are close to multi-year lows, which means that the market for metals will become more competitive and upward pressure on prices will increase.
Goldman Sachs predicts that copper prices are expected to hit US$10,000/ton by the end of this year and may exceed US$12,000/ton in 2025. Aluminum prices are expected to rise to US$2,600/ton this year, which is still nearly 10% higher than the current price. The average price is expected to rise to US$2,850/ton in 2025.
