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On June 10, it was reported that from June 8 to 10, Xian Hui, Vice Chairman of the National Committee of the Chinese Peoples Political Consultative Conference (CPPCC), led a delegation to Vietnam. She met separately with Tran Cam Tu, member of the Politburo and Permanent Secretary of the Secretariat of the Communist Party of Vietnam (CPV), Bui Thi Minh Hoai, member of the Politburo and Chairwoman of the Central Committee of the Vietnam Fatherland Front, and held talks with Hoang Cong Thuy, Vice Chairwoman of the Vietnam Fatherland Front. Xian Hui stated that recently, Xi Jinping, General Secretary of the CPC Central Committee and President of China, and To Lam, General Secretary of the CPV Central Committee and President of Vietnam, who was visiting China, had in-depth exchanges on overall and strategic issues of common concern, drawing a blueprint for building a higher-level, strategically significant China-Vietnam community with a shared future. China is willing to work with Vietnam, following the strategic guidance of the top leaders of the two parties and countries, to deepen mutually beneficial cooperation and promote the building of a China-Vietnam community with a shared future in a more profound and practical way. The CPPCC is willing to contribute to this endeavor.On June 10th, TSMC Chief Financial Officer (CFO) Huang Jen-chao stated in a recent interview that inflation is pushing up the companys operating costs, and indicated that a price increase for chips cannot be ruled out. However, Huang also stated that TSMC will not suddenly raise prices "four or five times."1. US May CPI Data Preview: The US will release its May CPI data at 8:30 PM Beijing time on Wednesday. The market widely expects inflation to rise further, with the overall CPI increasing by 0.5% month-on-month and the year-on-year growth rate rising to 4.2% (the first time it has surpassed 4% since May 2023); the core CPI is expected to rise slightly year-on-year to 2.9%. Significant increases in energy costs and service prices are the main drivers, but with the gradual completion of revisions to previous housing data, the May data may fall short of expectations. 2. Interest Rates and Futures Market Pricing: Gennadiy Goldberg, Head of US Interest Rate Strategy at TD Securities, points out that the combination of strong employment data and high inflation has increased the markets perception that the Federal Reserve is forced to tighten policy. Current futures market pricing indicates that investors expect a full 25 basis point rate hike by the end of the year. 3. Gold Market Faces a Key Test: Analysts point out that international gold prices have corrected by more than 22% since reaching their historical highs, and tonights CPI data will determine the short-term direction of gold prices. If the data meets or exceeds expectations, it will strengthen expectations of accelerating inflation and the Federal Reserve maintaining high interest rates or even raising rates, putting pressure on gold. If it falls short of expectations, it may boost expectations of interest rate cuts, creating conditions for a gold rebound. 4. Everbright Futures view: Geopolitical events are recurring. On the 9th, the US launched a "self-defense" strike against Iran, but the US stated that it would not interfere with the US-Iran negotiations. Considering the support of energy prices and the low base in the same period last year, the market expects that the US May CPI is likely to exceed 4% year-on-year tonight. Coupled with the resilience shown by the non-farm payroll data last Friday, if the CPI rises higher than expected, the expectation of a hawkish monetary policy will be further increased, and gold may be under pressure in the short term. 5. Founder CIFCO Futures view: It is expected that the US May CPI will increase by 4.3% year-on-year and the core CPI will increase by 0.3% month-on-month. If the data exceeds expectations, it will further exacerbate inflation concerns, pushing the US dollar and US Treasury yields to continue to be strong, while precious metals and industrial commodity prices will continue to be under pressure. If the data meets or falls short of market expectations, it is expected to alleviate market concerns about the Feds interest rate hikes, and gold and silver may have a chance for a phased rebound. (The above content is compiled from publicly available market information such as foreign media, TD Securities, and Founder CIFCO Futures, and is for reference only. It does not constitute investment advice.)On June 10th, the China Association of Automobile Manufacturers (CAAM) released data showing that in May 2026, my countrys new energy vehicle market stabilized and rebounded, with production and sales reaching 1.554 million and 1.496 million units respectively, representing year-on-year increases of 22.4% and 14.4%. The proportion of new energy vehicle sales in total new vehicle sales further increased, reaching 56.9%. In May, my countrys automobile production and sales reached 2.616 million and 2.629 million units respectively, showing month-on-month growth but a slight year-on-year decrease, although the decline narrowed further. Overall, in the first five months, automobile production and sales reached 12.235 million and 12.207 million units respectively, of which new energy vehicle production and sales reached 5.841 million and 5.802 million units respectively, representing year-on-year increases of 2.5% and 3.5%.June 10th - According to the China Association of Automobile Manufacturers, my countrys automobile exports continued their rapid growth in May. The latest data shows that my country exported 930,000 vehicles in May, a year-on-year increase of 68.7%, marking the second consecutive month that exports have remained above 900,000 vehicles. Among them, exports of new energy vehicles showed a particularly high year-on-year increase, reaching 446,000 units, a 110% increase year-on-year.

Forecast for the price of gold: Buyers of XAU/USD approach $1,800 on a weaker DXY ahead of US inflation

Alina Haynes

Aug 09, 2022 15:27

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The price of gold (XAU/USD) rose recently on the strength of a weaker US dollar and softer yields before rounding up to $1,790 on Tuesday during the first Asian session. The key started the week's trading on a strong note but fell by the end of the day, thus the metal's rising trajectory also borrowed ideas from equities.

 

US Dollar Index (DXY) followed Treasury rates to maintain Friday's significant gains, giving the greenback measure its first positive weekly result in three weeks. However, the US 10-year Treasury yields decreased by over seven basis points (bps) to 2.75 percent at the latest, following a 14-bps run-up on Sunday, while the DXY reported a 0.19 percent daily loss to 106.37 by Monday's conclusion.

 

The market's possible indifference to the US-China disputes over Taiwan and China's strong July trade figures may also work in the purchasers' favor. Despite this, the dragon country continues to conduct military exercises close to the Taiwan border, despite recent US signals to the contrary. China's trade statistics for July are also included. Compared to predictions of $90 billion and $97.94 billion, the overall trade balance increased to $101.26 billion. More information indicates that imports fell to 2.3 percent compared to 3.7 percent predicted and 1.0 percent prior, and exports rose by 18 percent, below expectations of 15 percent and 17.9 percent, respectively.

 

However, it's important to note that rising hawkish Fed bets and the Fed's policymakers' support for the rapid rate hikes put the XAU/USD bulls under pressure. Despite this, following the positive US jobs report for July, interest rate futures indicated a 73 percent possibility of a 75 basis point rate hike by the Fed in September. The headline Nonfarm Payrolls (NFP) increased to 528K, exceeding the 250K expectation and the 398K previously upwardly revised. Additionally, the unemployment rate decreased slightly to 3.5 percent from the predicted and previous readings of 3.6 percent.

 

Following the release of the data, San Francisco Fed President Mary Daly stated over the weekend that the Fed's fight against inflation was far from over. The policymaker also stated that a 50 bps increase was unquestionably in the cards. We must have an open mind. Fed Governor Michelle Bowman echoed this sentiment when she stated that the Fed "should consider additional 75 basis-point interest rate hikes at upcoming meetings in order to bring excessive inflation back down to the central bank's target."

 

Future gold buyers may benefit from the weakening US dollar as well as the technical information provided below. The US Nonfarm Productivity and Unit Labor Costs for the second quarter will be crucial to monitor (Q2). Forecasts indicate that US Nonfarm Productivity may increase to -4.6 percent from -7.3 percent before, while Unit Labor Costs may decrease to 9.5 percent from 12.6 percent previously. Additionally, news about Russia and Taiwan will be crucial for obtaining precise instructions.

 

The price of gold not only recovered from a crucial short-term support line, but also crossed the 50-DMA for the first time since late April on a daily closure. In order to inspire confidence in purchasers, the rising rise takes cues from the higher RSI (14), which is not overbought, as well as positive MACD signals.

 

Having said that, the XAU/USD buyers are prepared to push through the $1,802 Fibonacci retracement of the April-July slide to reprise the monthly high near the $1,800 mark.

 

But beyond that, a downward-sloping resistance line from mid-June, near $1,827, would pose a problem for the gold bulls. The metal's short-term downside might be constrained by the 50-DMA and the aforementioned support line, which are respectively located near $1,786 and $1,780.

 

The 21-DMA and the 23.6 percent Fibonacci retracement level, which are located at $1,755 and $1,741 in that order, could then catch the attention of the XAU/USD sellers. Overall, the price of gold seems poised to build on recent gains and move closer to the 1.5-month-old resistance line.


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