Gold price hits $2100, US bond yields plunge! Market sentiment is bullish, analysts are cautiously optimistic.

On March 1, the international gold price surged, with London spot gold closing at $2,082.395 per ounce, the highest level since late December last year. Recently, economic data in the United States has been lower than expected, providing room for gold prices to rise. International gold price approaches $2,100 Spot gold widened its gains on Friday, March 1, approaching the $2,100 per ounce mark. At the close, London spot gold rose by 1.89%, closing at $2,082.395 per ounce. COMEX gold futures rose by 1.80% to close at $2,091.60 per ounce. US bond yields plummet It is worth noting that since the Federal Reserve began its interest rate hike cycle, the yield on 2-year US Treasury bonds has been higher than the yield on 10-year US Treasury bonds for over a year. The yield curve has inverted by over 100 basis points, which is seen as a signal of a looming recession in the US. Recently, Federal Reserve Governor Waller stated his support for shifting the Fed's holdings towards a larger proportion of short-term government bonds. At the same event, Dallas Fed President Logan reiterated her view that as bank reserves decline, the Fed may begin to slow down the pace of reducing its balance sheet. After Waller's speech, the yield on interest-rate-sensitive 2-year US Treasury bonds fell further, dropping over 10 basis points to 4.52%, hitting its lowest level since February 15. The longer-term US bond yield fell by a smaller margin, with the 10-year US bond dropping 6 basis points to 4.18%, easing the inversion of the yield curve. Weak US economic data Data shows that US manufacturing continued to decline in February, with the February manufacturing PMI at 52.2, higher than 50.7. Consumer sentiment at the University of Michigan was also weak. Earlier, US inflation in January was at its lowest rate in nearly three years, leading to expectations of a rate cut by the Fed in June. The latest data from the Institute for Supply Management (ISM) shows that the US ISM manufacturing PMI fell from 49.1 in January to 47.8 in February, well below the market's expectation of 49.5. This indicates a 16-month consecutive decline in manufacturing activity, erasing hopes for a recovery in the industry. The disappointing data provides new momentum for the rebound in gold prices. New York-based independent metal analyst Tai Wong stated that in the background of data falling short of expectations and relatively mild comments from the Fed, there has been continued buying in the market. Chief currency strategist at Forexlive.com Adam Button stated that the rebound on Friday shows the potential of gold's strength, but he does not believe that this rebound is supported by a strong fundamental outlook. "I just don't understand how a misstep in the ISM manufacturing could lead to such a high price. If the job data is actually disappointing, then I would be more convinced that this rebound is sustainable," he said. "Investors really need to pay attention because it shows how many investors are waiting for the dollar to strengthen before entering the market." Senior market strategist at Forex.com James Stanley also stated that he would not chase the market, although he expects prices to rise in the near term. "I don't think the Fed's shift is here yet. While I have been very bullish on gold over the past few weeks, even after testing $2,000 per ounce, I don't want to chase over $2,075 per ounce in the spot market. This was the high point in 2020, and it remains a significant resistance for bulls for the next three and a half years," he said. "The non-farm payroll report next week will be a big deal for the macroeconomy, but it won't come out until Friday, so there may be some testing around $2,100 per ounce, but I am optimistic about chasing the trend to break through that level and catch up near it in the future. Long-term resistance." Analysts have differing opinions on the future of gold prices The closing price of gold reached a new high, fueling bullish sentiment in the market. However, results from the weekly Kitco News gold survey show that both Wall Street analysts and retail investors are cautiously optimistic about gold next week. The survey shows that 11 analysts (or 79%) are bullish on gold. At the same time, three analysts (or 21%) hold a neutral stance on the precious metal. Meanwhile, sentiment among retail investors continues to steadily improve. This week, Kitco's online survey received a total of 175 votes. Slightly better than last week, 77 retail investors (44%) expect gold prices to rise next week. Another 43 respondents (25%) predict a price decline, while 55 respondents (31%) hold a neutral outlook for the near future of the precious metal. Marc Chandler, Managing Director of Bannockburn Global Forex, stated that $2,088 per ounce may be a key resistance point for gold next week, "apart from that, there is a historical high set in early December, reaching $2,135.60 per ounce. I believe we will see the need for the resilience of the dollar to collapse, and this may require more confidence in the recent Fed rate cuts. Some Wall Street economists have begun to give up on rate cuts, with former Treasury Secretary Summers warning that the next move may still be a rate hike." Sean Lusk, Co-Director of Commercial Hedging at Walsh Trading, believes that gold prices have the potential to rise, but he is still hesitant to chase the market. Lusk added that investors can consider certain options to gain exposure to gold and take advantage of market momentum. He suggested a medium-term strategy of buying August call options for gold at $2,100 per ounce and selling February put options at $2,275 per ounce. This article is taken from the WeChat public account "Wind WanDe"; Edited by GMTEight: Wang Qiujia.