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The Federal Reserve's big bet on interest rate cuts, who is secretly planning it?
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Hello everyone, today XM Forex will bring you "[XM Forex]: The Federal Reserve's big bet on interest rate cuts, who is quietly planning it?". Hope this helps you! The original content is as follows:
Wednesday, November 12th. Precious metals continue to strengthen under the interaction of macro expectations and US dollar fluctuations. Spot silver is consolidating at a high level after continuing five consecutive positive days. It is currently trading around US$51.50 before the US market opens. The market's core clues still lie in the re-pricing of the Fed's expected rate cut within the year and the fall in real interest rates, while the improvement in risk appetite brought about by the advancement of the US temporary appropriation bill has formed a certain hedge against hedging demand.
Recent employment-related data have been weak, driving market bets on the Federal Reserve to start cutting interest rates within the year. The implied probability of interest rate futures once rose to about 60% and then moved closer to nearly 70%. The direct result of this repricing is that nominal yields and real interest rates have fallen simultaneously, reducing the opportunity cost of holding non-interest-bearing assets, and the precious metals sector has received a systematic boost.
At the same time, the advancement of the temporary appropriation bill has eased fiscal uncertainty and boosted risk asset sentiment in the short term. Normally, this would weaken the safe-haven premium of precious metals. However, during the periodic window when the Federal Reserve interest rate is expected to turn dovish quickly, the safe-haven premium and the improvement of the discount factor coexist, and the decline of the former is not enough to offset the increase in valuation brought by the latter, thus forming a net effect of "tailwinds outweighing the headwinds" for silver prices. It should be noted that if subsequent high-frequency data or official statements delay the pace of interest rate cuts again, a rebound in risk appetite and an increase in real interest rates may suppress precious metals in the short term.
In terms of market performance, silver has gained nearly 10% in the past two weeks, with both weekly and month-to-date gains exceeding 7%. During the European session, it once reached around $51.8, and then retreated due to the dollar's rebound and short-term profit-taking, but the overall strong consolidation pattern was still maintained. The intraday transaction structure shows that momentum funds and trend funds are superimposed, and the current price difference and the futures price difference areThere is no obvious deviation from the changes in the limit structure, indicating that the upward trend is mainly xmxyly.completed by macro-driven and capital promotion, rather than a pure short-term squeeze.
Precious metal-related ETF positions showed signs of stopping against the background of previous continuous outflows, and the activity of futures market transactions increased, indicating that macro funds are returning to the precious metal sector with the xmxyly.combined demand of "hedging inflation and hedging growth fluctuations." Because of its higher elasticity, silver has become a higher beta carrier for funds to express interest rate expectations. This financial support and technical strength mutually reinforce each other, but it also means that the rise in the volatility center will be accompanied by an amplification of the retracement.
At the supply and demand level, mining and recycling supplies are generally stable, and there is no systematic inflection point in inventory. The demand side maintains resilience driven by photovoltaic and electronics-related chains but lacks clear evidence of "acceleration." Judging from this, the dominant factors in price are still changes in financial conditions and discount rates, and supply and demand play more of a role in "not being overly constrained." If there is a subsequent cost-side impact or the inventory cycle is actively depleted, the premium on silver's industrial attributes will provide a second impetus, but the current evidence is still insufficient.
Technical aspects
On the daily line, silver rebounded step by step from the 45.53 line and returned to above 50.65. The previous high of 54.44 constitutes stage pressure. In the figure, the vicinity of 51.88 is also near-end resistance, and 47.00 is significant support. After Lianyang, the K-line entities converged, and the upward momentum slowed down.
MACD turned up from the low level, the column turned from negative to positive, the fast and slow lines crossed golden again, the kinetic energy is high but the slope is average. The RSI(14) rose to 64, which is strong but not overheated. The overall situation is still a concussive upward structure after repairing from the bottom. Pay attention to the effectiveness of the backtest in the 50.65-51 range and the changes in selling pressure brought about by 52-53.4; the choice within the range will determine the subsequent rhythm and amplitude of fluctuations.
Looking ahead
Short-term pricing is still anchored on three main lines: First, the Fed's xmxyly.communication caliber and the soon-to-be-released high-frequency data on inflation and employment determine the time and magnitude of expected interest rate cuts; second, the linkage direction between the U.S. dollar and U.S. bond yields determines the marginal changes in precious metal discount factors; third, the periodic fluctuations in global risk appetite determine the strength of silver's "safe haven premium" and "growth expectations." The change in the xmxyly.combination of the three will directly affect whether silver consolidates at a high level to absorb the gains, or whether it will test the upper edge again after the momentum changes hands.
In scenario deduction, if follow-up data continues to verify that growth is slowing and inflation is falling, the interest rate path will be more relaxed, and the decline in real interest rates will be maintained, which will be a tailwind for silver, and prices are expected to try to reprice the upper edge area; if the data rebound prompts the market to adjust interest rate cut expectations, and the dollar and yields rebound, silver will easily shift to high levels of shock or even a phased retracement, and xmxyly.complete momentum restoration through a longer period of sideways trading. What the two scenarios have in xmxyly.common is that a change in trend requires a directional reversal in core macro variables rather than a single event disturbance.
Taken together, this round of silver’s rise is mainly driven by the financial trend of “rising expectations for interest rate cuts – falling actual interest rates – rising funding preferences”Driven by the main line of finance, the U.S. dollar's phased rebound and improved risk appetite pose headwinds, but the impact is still minor under the strong driver. The price level shows "adjustment in strong strength", which is structurally reflected in high sideways trading or re-impact after an orderly retracement.
The above content is all about "[XM Foreign Exchange]: The Federal Reserve's big bet on interest rate cuts, who is secretly planning it?" It was carefully xmxyly.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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