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Japanese Chief Cabinet Secretary Minoru Kihara: I hope the Bank of Japan will work closely with the government to formulate appropriate monetary policies to achieve the 2% inflation target in a stable and sustainable manner, and that inflation should not be driven by cost-push factors but by wage growth.On March 19th, the Reserve Bank of Australia (RBA) warned on Thursday that the Middle East conflict could trigger a severe international shock, but that Australian banks are well-positioned to support the economy should a significant downturn occur. In its semi-annual Financial Stability Review, the RBA listed a range of global vulnerabilities, including a potential collapse in financial markets, cyberattacks, and the spread of unconventional policies. This implies that the risk of a significant adverse shock to the domestic economy has increased in recent weeks. The RBA stated, "The Middle East conflict could trigger a larger shock, thereby disrupting the global economy, particularly given the continued supply disruptions in oil and other commodity markets… Given the significant increase in leverage and concentration in key global asset markets in recent years under low-risk premiums, this increases the likelihood of disorderly asset repricing in the event of further adverse developments." The RBA also stated that investments related to artificial intelligence could face a significant sell-off risk if productivity fails to improve as expected.On March 19, the Russian Ministry of Defense reported that on March 18, Russian forces conducted strikes in 145 regions against targets serving Ukrainian energy and transportation infrastructure, as well as temporary deployments of Ukrainian troops and foreign mercenaries, shooting down three precision-guided bombs and 316 drones. Additionally, Russian forces seized control of a settlement in the Donetsk region. On the same day, the General Staff of the Ukrainian Armed Forces reported that Ukrainian forces were thwarting Russian attempts to advance deeper into Ukraine, inflicting significant personnel and equipment losses in multiple locations. The Ukrainian Air Force, missile units, and artillery attacked three Russian personnel assembly areas and three drone control points, shooting down over 1,100 Russian drones.March 19th, Futures News: Positive news in the oil market boosted bullish sentiment in the fuel oil market. Some downstream users moderately replenished their inventories at lower prices, while refineries were reluctant to sell at low prices, significantly pushing up the negotiation point. With major refineries in northern China about to shut down, the tightening supply of low-sulfur residue oil/asphalt is expected to further support the market. Fuel oil negotiations are expected to maintain a slight upward trend today.A chart summarizing the overnight price movements of international spot platinum and palladium.

Gold Hits 10-Month Low Due to Fed/One-Two Dollar's Punch

Haiden Holmes

Jul 07, 2022 11:20


Is gold safe at $1,700? Given how far south the yellow metal has traveled in only two days, the question is legitimate.


August gold futures on the New York Comex concluded Wednesday's trading at $1,736.0 per ounce, down $27.40, or 1.6%. The day's minimum value was $1,730.95.


Gold's most recent nadir provides a $30 cushion between the next horror scenario and longs in the game — $1,600 area.


Sunil Kumar Dixit, chief technical strategist at skcharts.com, warned that if gold fails to achieve $1,768 it will continue under pressure and aim for $1,722-$1,698.


The dollar's rebound and the Federal Reserve's hawkish attitude have virtually pushed gold to September 2021 lows.


Wednesday was the first occasion since December 2002 when the Dollar Index, which measures the dollar against six major currencies, topped 107 points. Since November of last year, the dollar has climbed steadily on projections of quick rate hikes by the Federal Reserve, which have barely started to materialize.


Gold's malaise also coincides with the Fed's relentless rate hike talk. The Fed's vow to tame the inflation beast by increasing the Fed funds rate before the end of the year has damaged bullion prices for weeks. However, central bank authorities have shown no hesitation to pursue this purpose.


According to minutes from a central bank policy meeting held last month, the Fed considers there is a serious danger of high inflation getting entrenched in the US economy and that modest interest rate hikes are the only way to balance runaway prices with growth.


During the outbreak, the Fed held interest rates between zero and 0.25 percent for two years until boosting them in March of this year. Since then, rates have hit between 1.5 and 1.75 percent. The central bank has declared that it will continue to hike interest rates until inflation, which has hit 40-year highs of more than 8 percent yearly, returns to its objective rate of 2 percent annually.


This month, the Fed is expected to continue with another quarter-point rate rise.


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