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On June 17th, Jarden economists warned that the Reserve Bank of Australia (RBA) cannot accelerate the natural decline of inflation by adjusting interest rates. In their research report, they pointed out that the composition of inflation is more important than its level, and they expect core inflation to remain above 3% until the second half of 2027. They noted that the main reason for the significantly higher-than-expected inflation rate is not an overheated domestic economy, but rather related to fuel costs, which are beyond the control of officials or politicians. This situation should ease as the situation in the Middle East normalizes, but Jardens core concern is the extent to which cost pressures will affect Australian goods and services.June 17th - According to a Wall Street Journal survey of economists, 10 out of 12 believe the Philippine central bank is likely to raise its policy rate by 25 basis points to 4.75% on Thursday. Economists at Capital Economics noted in a report that the Philippines is one of the Asian economies most severely affected by the energy shock, and inflation has exceeded the central banks target range in recent months. The firm added that while inflation concerns may prompt the central bank to raise rates, it will also consider economic weakness in its decision-making. Two economists predict a larger rate hike, reaching 50 basis points. HSBC analyst Aris Dacanay believes the rate hike could be even larger given the central banks price stability target.Gold rose in early Asian trading on June 17th. Zaheer Anwari, CEO of The Revacy Fund, stated that improved market confidence, driven by easing concerns about energy supply disruptions, inflation, and interest rates, created a more favorable environment for gold. Traders are closely watching the decisions of several central banks this week. While the Bank of Japans rate hike supported Japanese bond yields and may limit golds upside, investors expect the Federal Reserve to keep rates unchanged. If the Feds updated economic and inflation forecasts remain positive, it could further boost gold prices. Furthermore, continued central bank position building will provide strong structural support. Anwari believes gold prices will find stable support around $4,000 per ounce.Goldman Sachs: We expect liquefied natural gas flows to return to normal by the end of July, later than our previous expectation of the end of June.On June 17, the Peoples Bank of China (PBOC) announced that it will issue the sixth tranche of central bank bills for 2026 through the Hong Kong Monetary Authoritys Central Moneymarkets Unit (CMU) bond bidding platform on June 22, 2026 (Monday). The sixth tranche of central bank bills has a maturity of 6 months (182 days), is a fixed-rate interest-bearing bond, and will be repaid with principal and interest at maturity. The issuance amount is RMB 40 billion, the interest accrual date is June 24, 2026, and the maturity date is December 23, 2026. The maturity date will be postponed if it falls on a public holiday.

Forecast for the Gold Price: XAU/USD moves up above $1,850 as yields fall following FOMC minutes

Daniel Rogers

Jan 05, 2023 15:01

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In the late New York session, the gold price (XAU/USD) has attracted buying activity following a corrective move to approach the critical support of $1,850. After failing to sustain above $1,860.00, the precious metal declined; however, the corrective move is light and does not indicate a serious reversal.

 

After a decline in the U.S. Manufacturing PMI bolstered indications of further deceleration in the U.S. Consumer Price Index, market participants' demand for risk-perceived assets such as the S&P 500 increased (CPI). In response to a decrease in product demand, corporations may be compelled to reduce the price of factory items.

 

The US Dollar Index (DXY) fell below the 104.00 level as yields on 10-year US Treasuries were subjected to intense pressure and plummeted to roughly 3.69 percent. Safe-haven assets are under pressure due to the anticipation of a further fall in inflationary pressures. After remaining aggressive throughout the entire year, Federal Reserve (Fed) head Jerome Powell changed to a slowing scenario in December regarding an interest rate hike. Undoubtedly, the inflation rate is still a significant distance from the 2% target; yet, the presence of factors that support a further deceleration in the price index weighs on safe-haven assets.

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