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On August 29th, NBC News, citing two sources familiar with the matter, reported that US Defense Secretary Peter Hegseth has been discussing the possibility of running for president in 2028 with close associates in recent months. Hegseth and his wife believe he shares some similarities with Trump, including a tough, confrontational style and conservative stances on social issues, which could garner support from the MAGA base. This month, Hegseth also traveled to Iowa to campaign for Republican lawmakers. Iowa has long been a key outpost in US presidential elections, further fueling speculation that he is preparing to run. If he does run, Hegseth could compete with Vice President JD Vance, Secretary of State Rubio, and others. However, a Pentagon spokesperson denied the claims, stating that "Secretary Hegseth will not run for president," and that his primary focus remains leading the Department of Defense. The report points out that the ongoing war with Iran could be a major political burden for Hegseth, with 18 US military personnel already killed and the average US gasoline price rising from less than $3 per gallon to slightly over $4.On August 29th, Allianz Chief Economic Advisor Mohamed El-Erian stated that todays changes in the US Treasury yield curve released two signals. The spread between the 2-year and 10-year yields narrowed by approximately 7 basis points, and the spread between the 2-year and 30-year yields narrowed by approximately 10 basis points, showing a flattening trend. El-Erian believes this reflects a dual interpretation in the fixed-income market: in the short term, it represents a hawkish repricing following Federal Reserve Chairman Warshs firm commitment to the inflation target; in the long term, it reflects recognition of the Federal Reserves long-term credibility.According to NBC News, U.S. Defense Secretary Hergsays is considering running for president in 2028.On August 29th, Deutsche Bank economists predicted that the Federal Reserve would raise interest rates by 25 basis points each in September and December. Fed Chairman Warsh, in his Jackson Hole speech, emphasized the need to bring inflation back to the 2% target and released a clearly hawkish signal. Deutsche Bank believes that unless future economic data is "significantly weaker than expected," the threshold for avoiding a 25 basis point rate hike in September is already very high. The market has also quickly increased its bets on rate hikes: CME data shows that the probability of a cumulative rate hike of 50 basis points or more by December has risen to 51%, up from only 29% the previous day; the probability of a cumulative rate hike of 25 basis points is 38%, and the probability of keeping rates unchanged is only 11%. Following Warshs speech, market bets on a September rate hike have also clearly intensified.US President Trump criticized New York Governor Hoher for "taking Canadas side," refusing to use the name "American Lake," and "preferring Canada to win," while also supporting Blackman as the next governor of New York.

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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