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fishfryvideopokergame| KGI Asia: Federal Reserve's "hawkish" stance limits stock market rally, gold has a safe haven effect

24-04-24Economics围观14

简介 Kaiji Asia posted thatFishfryvideopokergameIn the past week, the news of an attack on Iran's nuclear

Kaiji Asia posted thatFishfryvideopokergameIn the past week, the news of an attack on Iran's nuclear facilities caused panic in the market, and although the news was clarified, the situation in the Middle East remained uncertain. At the same time, the US economy was stronger than expected, Federal Reserve officials released "hawkish" remarks, and global stock markets generally fell, with technology stocks and the Philadelphia Semiconductor Index falling the most. Long-and short-term bond prices also generally fell on expectations of a delayed interest rate cut, with only Asian investment grade bonds rising slightly. Although almost none of the stocks and bonds were spared, some commodities still benefited from the increase in geopolitical uncertainty.

Safe haven demand is generally good for gold. Gold prices have risen by about 17% in the past three months, outperforming the world's major stock markets, oil prices and copper prices. Spot gold prices rose above $2400 an ounce at one point in the middle of this month, reaching another all-time high.

fishfryvideopokergame| KGI Asia: Federal Reserve's "hawkish" stance limits stock market rally, gold has a safe haven effect

Kaiki Asia pointed out that geopolitical instability and the Fed's "hawkish" attitude are both bad for the stock market. For gold, however, the two effects are likely to offset each other. In the past few systemic risks or recessions, such as the "9 / 11", the 2008 financial tsunami and the European debt crisis, US stocks fell sharply, while gold and US stocks moved in the opposite direction. it is expected to achieve a risk aversion similar to that of US Treasuries and investment grade debt. In the current Israeli-Iraqi conflict, gold also plays a role in avoiding risks to a certain extent.

However, at present, US interest rates and the US exchange rate index are at multi-year highs, coupled with officials' signals of "hawks", which may be a drag on gold. Since gold does not yield, holding gold means giving up when interest rates are highFishfryvideopokergameWith the interest on holding bonds, the opportunity cost of investing in gold rises. In the past, gold and real interest rates showed a high negative correlation, and the correlation coefficient between gold and US 10-year real interest rates reached-0 in the past 20 years.Fishfryvideopokergame. 67 . In other words, if the world's central banks turn to cut interest rates in the future, lower interest rates will help gold prices rise.

In addition, apart from the favourable scenarios of economic slowdown and interest rate cuts, treasury bonds and investment grade corporate bonds also have a risk aversion function when systemic risks arise, which may help to reduce the volatility of the entire portfolio, thereby reducing risk.

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