Fed Led Central Bank Carnival Week Gold Market Attention

Last Friday (March 13th) data showed that the US producer price index (PPI) fell 0.5% in February, the expected growth of 0.3%, the previous value fell 0.8%, has been declining for four consecutive months, reflecting that the recent strong US dollar appreciation has already affected traders' profits and suppressed their purchasing power. In the same period, the US wholesale price in February dropped unexpectedly for fourth consecutive months, reflecting the decline in profit margins of wholesalers and retailers. The US consumer confidence index in March dropped to a 4 month low in March.

Bad data had cooled investors' expectations of the Fed's rate hike in June, and international gold prices rose last Friday, ending the longest decline in 17 years.

However, the focus of this week's gold market is undoubtedly the two day FOMC meeting of the Federal Reserve on Tuesday (March 17th) to Wednesday (March 18th).

The market expects the US Federal Reserve to maintain interest rates unchanged, but will consider removing the phrase "patience" in the forward-looking guidance on interest rates.

The deletion of the word "patience" is seen as a step closer to raising the Fed's interest rate by two.

Federal Reserve Chairman Yellen will give a press conference on the policy statement and the Fed's amendment to the adjustment of economic, unemployment, inflation and interest rate expectations.

Morgan Stanley and other big analysts said that the Federal Reserve will be closer to the "trigger trigger" at the policy meeting on 17-18 March, and may eliminate the phrase "patience" to pave the way for the subsequent increase in interest rates.

The bank believes that the Fed emphasizes

"Relying on economic data" is expected to get more flexibility from the policy statement this week.

At the same time, the bank expects the fed to take a cautious stance on the appreciation of the exchange rate, the uncertainty of the economic data and the uncertainty of the inflation outlook, and the rate hike in September looks most likely.

Bank of America Merrill Lynch said this week the Fed's interest rate policy statement will be converted to data oriented, raising interest rates in June. It is expected that the Federal Reserve will continue to describe low inflation as "temporary".

On the whole, if the Fed fails to eliminate the wording of patience in the policy statement as scheduled, the interest rate increase will become more apparent, and the US dollar will further strengthen, and the gold price may be down to the low level of 1130 US dollars in November last year.

On the contrary, it is a dovish statement that gold prices are expected to start a short rebound.

Of course, apart from

Outside the meeting, this week the Bank of Japan and the SNB interest rate resolution, the Bank of England and the RBA minutes, while the European central bank governor Delaki's speech is also the central bank's noteworthy focus.

The performance of other currencies will also affect the exchange rate of the US dollar, which will trigger the fluctuation of gold prices.

The EU executive committee issued a warning last week, saying if

The abandonment of the euro will be a "catastrophe" and executive chairman Juncker urged the EU government to unite as a result of Greece's difficulty in obtaining more credit.

German finance minister Schauble (Wolfgang Schaeuble) said Greece might be leaving the eurozone because of its failure to negotiate new lending agreements, while Juncker said the EU hardliners underestimated the risk of Greece's possible collapse of the euro area by the Greek issue.

However, in fact, some conservative allies of German Chancellor Merkel do not think so. They support Greece's withdrawal from the euro zone.

Many Greeks hate the conditions that Europe and the International Monetary Fund (IMF) provide from the 2010, but most of them want to stay in the euro zone.

This will be a dangerous situation. If the government fails to run out of credit, Greek banks will not be able to get the euro from the European Central Bank.

Greek government spokesman Gabriel Sakellaridis said on Friday (March 13th) that Prime Minister Tsipras would hold a referendum if creditors requested additional measures to exchange funds for gold aid.

Meanwhile, Greek defense minister Carmen North (Panos Kammenos) received an exclusive interview with the German pictorial on Saturday (March 14th), saying that if Greece withdrew from the euro area, Spain and Italy would eventually withdraw.