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On August 2, Alexei Pushkov, a member of the Constitutional Committee of the Russian Federation Council, stated that the world cannot replace the amount of oil supplied by Russia, which accounts for about 10% of the global oil supply. Pushkov wrote on his social platform: "Despite Trumps warning of imposing high secondary sanctions tariffs, Indian refineries continue to purchase Russian oil. The Indian side explained that if the global market stops accepting 9.5 million barrels of oil per day from Russia, oil prices may rise to $135-140 per barrel. In fact, such a large amount of oil supply cannot be replaced at all, because Russia accounts for about 10% of the global oil supply."According to Argus on August 2, the eight core OPEC+ members will decide on August 3rd whether to fully exit their 2.2 million barrels per day (bpd) crude oil production cuts in September or adopt a more cautious approach due to heightened supply and demand uncertainty. The group has already decided to implement approximately 80% of its planned 2.46 million bpd production increase (including a 300,000 bpd adjustment to the UAEs quota). Market expectations are for another 548,000 bpd increase in September, matching the accelerated increase in August and restoring production 12 months earlier than originally planned. One delegate confirmed his countrys support for completing the full production increase in September, a move long advocated by several major members, particularly given that some countries have been producing above their quotas. However, due to concerns about oil prices, at least one member favored a cautious approach, suggesting that the 548,000 bpd increase be split into smaller adjustments of 137,000 bpd per month from September to December.On August 2nd, Federal Reserve Board Governor Kugler abruptly announced his resignation on Friday, giving US President Trump an opportunity to fill the Fed vacancy earlier than expected and potentially forcing him to finalize his next chairmanship months in advance. Derek Tang, an economist at the monetary policy analysis firm LH Meyer, said, "The ball is now in Trumps court. He has been pressuring the Fed to install his own candidate. Now his opportunity has arrived." While Powells term as chairman ends in May of next year, his term as a governor runs until 2028. If Powell doesnt voluntarily resign as a governor, Trump wont have another chance to fill the vacancy before 2028. In this scenario, Trump might be forced to fill Kuglers vacancy with a candidate he plans to promote as chairman. Tobin Marcus, head of US policy and political strategy at Wolfe Research, noted, "The key is that this is the only vacancy Trump can fill. If he wants to find the next Fed chair from outside, the nomination could be announced earlier."On August 2nd, Canadas retaliatory tariff increase against the United States earlier this year is leading the Trump administration to adopt a differentiated trade strategy with Mexico. Previously, Canada and Mexico enjoyed equal treatment—both were subject to a 25% base tariff and enjoyed extensive duty-free access under the USMCA. However, this situation took a sudden turn on Thursday: Trump announced a 90-day suspension of tariffs on Mexican goods, while simultaneously raising tariffs on Canadian products to 35%. Existing retaliatory measures have not only failed to curb the escalation of the conflict but have instead prompted even more severe retaliation from the United States. Economist and former Bank of Canada Governor Mark Carney has stated that retaliatory measures are limited in effectiveness. In fact, the Canadian government has diluted retaliatory tariffs through numerous exemptions, refrained from retaliating when the US raised steel and aluminum tariffs to 50%, and even eliminated its digital services tax at the request of the US.On August 2, the Palestinian Islamic Resistance Movement (Hamas) issued a statement today (August 2) emphasizing that "unless our national rights are fully restored, the most important of which is the establishment of an independent Palestinian state with Jerusalem as its capital and full sovereignty, we cannot give up armed resistance."

Does the price of gold have a bottom, or is it just a brief easing of selling pressure

Alina Haynes

Jul 08, 2022 11:58

 截屏2022-07-08 上午11.24.58.png

 

But there was no significant upward movement, no greater high than the day before, and no unmistakable sign that the current selling pressure had subsided. Instead, it appears that market investors are waiting to see what the upcoming two important data on inflation and employment will reveal.

 

The U.S. Labor Department will release the nonfarm payroll jobs data for June tomorrow, which will be the first significant report. The most recent inflationary figures will be released the next week when the BEA releases the CPI (Consumer Price Index) for the previous month. The confidence that the Federal Reserve will increase interest rates again this month is being anticipated by market players.

 

The current discussion, however, centers on whether the Fed would maintain its strong approach by simply hiking rates by 50 basis points, as opposed to implementing another 75-basis point rate hike, as it did in June. The Federal Reserve will continue to batten down the hatches as they have since March, regardless of what the employment and inflation reports show.

 

There is no disagreement, according to the FedWatch tool from the CME. This is due to the FedWatch tool's forecast that there is a 93.9 percent likelihood that the Fed would maintain its strong approach to combating inflation by implementing back-to-back rate rises of 34 percent.

 

The dual goals of achieving maximum employment and keeping inflation within a target range of 2 percent are no longer the Federal Reserve's primary concerns. Recent Federal Reserve FOMC remarks and minutes amply demonstrate the central bank's laser-like concentration on containing inflation, with full awareness that the escalating rate rises will cause an economic slowdown and a decline in the labor force.

 

Analysts and market players have been worried about this approach because they believe it would cause economic instability and a recession. According to the most recent consensus, employment growth is still strong but shrinking. This data is expected to show that there were about 272,000 new jobs added last month and that the unemployment rate remained constant at 3.6 percent.

 

The BEA will present the most recent inflation figures on Wednesday, July 13. We may anticipate that inflationary pressures will continue to run high with a potential spike when compared to the preceding month, if the most recent inflationary figures from Europe are any indicator of what the CPI report will show next week.

 

According to the most current economic data, the US economy has gotten worse, and consumer confidence has plummeted. However, it is also obvious that the Federal Reserve will continue to hike rates this month and in September in order to pursue its goal of bringing inflation down from its present high levels and 40-year highs.

 

It is most definitely a reasonable assumption that the current selling pressure in gold has not subsided given the extremely high likelihood that the Federal Reserve will implement a second straight rate rise of 75 basis points at the end of this month.

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