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Spot Gold as a whole this week, first down and then up, Monday on the 1867 U.S. dollars and then continued downward, Wednesday evening once down to 1831 U.S. dollars, Thursday after the release of U.S. GDP data, spot gold appeared a wave of pull-up, but soon gave back all the gains. On Friday, spot gold moved higher again, almost recovering the losses of the previous trading days, rising to above $1870.
Spot silver was flat for the first three trading days of the week, declining slightly overall, but on Thursday evening, spot silver suddenly surged 6%, jumping to $26, as U.S. retail investors brought up silver in Reddit forums. On Friday, spot silver continued to rise, rising above the $27 mark. As of this writing, spot silver rose above $27.40.
In the oil market, international oil prices have been in an overall oscillating trend this week. Before Thursday, both U.S. and Bu oil were slightly oscillating higher, but there was a sharp pullback on Thursday, and continued to fall after a brief pull-up on Thursday evening, giving back most of the gains from the previous days of the week. There was a slight recovery during the European session on Friday.
The U.S. dollar index has been oscillating this week, rising slightly from Monday to Tuesday before the European session, but continuing downward after Tuesday’s European session. On Wednesday, it rose again and once approached the 91 mark. Then maintain the oscillating trend, Friday during the European session, the U.S. index trend is significantly weaker. The EUR/USD oscillated to the downside this week, during which it rebounded several times but did not reverse the decline; the GBP/USD oscillated this week, rising as high as 1.3758 before falling sharply, and as of this writing, the GBPUSD is still above the 1.37 handle.
Bitcoin was flat until Friday, with overall narrow fluctuations, but on Friday, as Musk changed his Twitter profile to “#bitcoin” (bitcoin), bitcoin then surged, up more than $6,000 from its daily low, once returning to above the $38,000 mark, up more than 10%.
[Weekly Highlights].
U.S. Retailers Intensify Short-Selling Battle
This week, the most exciting and exciting event in the financial market is the short-selling war between U.S. retail investors and hedge funds.
U.S. retail investors traded options to raise the price of GME shares, forcing short-selling institutions Citron and Melvin Capital to surrender, and Melvin Capital eventually liquidated all of GME’s short positions.
But things didn’t end there, as U.S. retail favorites surged this week, with GameStop, AMC, BlackBerry, EXPRESS, American Airlines Group, etc. WSB concept stocks triggered multiple meltdowns in U.S. trading Thursday. The most incredible thing is that all stocks or other assets mentioned in the Reddit forum have magically risen.
For example, spot silver jumped 6% during the U.S. market on Thursday after a Reddit user posted about the silver ETF iShares. Dogcoin, which was also mentioned, also surged.
Faced with the madness of retail investors, U.S. brokerage platforms have also taken a frantic response. On Thursday all electronic trading platforms led by Robinhood restricted retail investors from buying GME, AMC and other stocks almost simultaneously. However, during the European session on Friday, several brokerages lifted their trading restrictions on users, resulting in another collective pre-market surge in U.S. retail favorites.
This matter is far from over. On Friday night, U.S. short-seller Citron Research will release a major statement that all individual investors will need to pay attention to.
This wave of short-selling has caught the attention of regulators. Democratic Senator Elizabeth Warren has urged regulators to take action and asked the SEC to crack down on the madness. The SEC has also said it is closely monitoring volatility in the options and stock markets.
Fed rate resolution releases pessimistic expectations
In the interest rate resolution released early Thursday morning, the Fed kept the federal funds rate in the 0-0.25% range and kept the size of its monthly asset purchases unchanged at $120 billion, exactly as the market expected.
However, the Fed released a pessimistic expectation signal, resulting in a sharp pullback in U.S. stocks. The Fed said that growth appears to be slowing due to the impact of the Epidemic in recent months, with the economy and employment recovering at a moderate pace and the economy’s weakness concentrated in the sectors most severely affected by the epidemic. The Fed also said that the economy will rely heavily on the situation of the development of the epidemic, adding that the impact of factors “including vaccination progress” expression. This is the first Time in the Fed’s statement to mention the pace of recovery and vaccination progress concerns.
The statement also removed the wording “near-term” and “medium-term”, which previously indicated that the epidemic posed pressure on the economy in the “near-term” and a risk to the economy in the “medium-term”. The statement also removed the wording “near-term” and “medium-term,” after the statement said the outbreak would “continue to weigh on economic activity, employment and Inflation, and pose significant risks to the economic outlook. This suggests that Fed officials may not know how long this uncertainty will last.
U.S. GDP growth in 2020 recorded -3.5%, a record low since 1946
On Thursday night, the U.S. released the preliminary annualized quarterly GDP rate for the fourth quarter of last year, recording a 4% rate, roughly in line with expectations. The U.S. GDP growth rate for the full year 2020 was recorded at -3.5%, the first negative reading since 2009 and a new low since 1946.
U.S. GDP growth in the fourth quarter reflected both the continued economic recovery from the sharp downturn earlier in the year and the ongoing impact of the new crown epidemic, including new restrictions and closures that took effect in some areas of the United States.
Notably, consumer spending, the largest contributor to U.S. economic growth, weakened particularly markedly in December. retail sales declined month-over-month in October, November and December, largely due to a decline in services spending, although retail sales remained higher compared to the same period last year.
IMF raises global economic growth forecast to 5.5%
On Tuesday night, the IMF released its latest January World Economic Outlook (WEO) report, again raising its expectations for global economic growth.
The IMF raised its forecast for global economic growth in 2021 to 5.5 percent from 5.2 percent last October, and left its forecast for global growth in 2022 unchanged at 4.2 percent. At the same time, the organization also raised its forecast for global economic growth in 2020 by 0.9 percentage points to 3.5 percent.
The IMF also raised its growth forecast for the U.S. to 5.1 percent in 2021. France, Germany, and Japan’s 2021 economic growth estimates were all revised upward, while the U.K. and Canada‘s 2021 growth estimates were revised downward.
The IMF expects the degree of recovery to vary widely across countries, depending on vaccination, the effectiveness of policy support, the impact on cross-country spillovers and the structural characteristics of entry into the crisis.
Yellen officially becomes the new U.S. Treasury Secretary
The U.S. Senate voted on January 25 to approve Janet Yellen, former chair of the U.S. Federal Reserve Board, as Treasury Secretary. Yellen became the first female treasury secretary in the history of the United States.
The Senate voted 84 for and 15 against the nomination of President Joe Biden.
Yellen as treasury secretary, will face how to guide Congress to agree to Biden’s proposed $1.9 trillion economic bailout package and other difficult issues. Currently, the package is encountering greater resistance from Republicans in Congress.
U.S. Senate to start advancing stimulus bill next week
According to CNBC, U.S. Democrats have begun paving the way for an epidemic relief plan, trying to pass Biden’s stimulus plan without Republican support. Republicans, on the other hand, have slammed the president’s plan as being too large. House Majority Leader Steny Hoyer (D-Md.) said Tuesday night (Jan. 26).
“We have the option to use the budget reconciliation process (budget reconciliation) to move forward with a new crown bailout.”
On Thursday, Senate Majority Leader Chuck Schumer (D-N.Y.) threatened to circumvent the 60 votes needed to pass key legislation by invoking a so-called “budget reconciliation process,” which would allow Democrats to bypass some lawmakers who are trying to block the bill.
Risk Warning
In terms of data, the most important thing next week is next Friday’s non-farm payrolls report. The market expects U.S. non-farm payrolls to increase by 85,000 in January after recording a negative reading last December, while the unemployment rate will remain unchanged. Next Wednesday’s mini-nonfarm payrolls are also expected to record a positive value.
In addition to non-farm payrolls, next week the United States and major European countries will be released in January manufacturing and non-manufacturing PMI values, these data may reflect the economic recovery of these economies in the first month of the year, investors need to pay close attention to the performance of these data.
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