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January 5 - On the afternoon of January 5, Chinese President Xi Jinping held talks in Beijing with South Korean President Lee Jae-myung, who was on a state visit to China.On January 5th, gold prices, along with other precious metals, climbed as safe-haven demand surged following the US arrest of Venezuelan President Maduro. Analysts at Saxo Bank in Denmark stated, "Gold and silver rebounded as investors sought refuge after the US action against Venezuela. Trumps statement that the US plans to take over Venezuela further exacerbated governance uncertainty." Last year, driven by Federal Reserve rate cuts, strong central bank demand, increased inflows into exchange-traded funds (ETFs), and investors shifting from sovereign bonds and currencies to hard assets, gold prices rose nearly 65%, marking their strongest annual performance since 1979.On January 5th, the Shanghai Futures Exchange (SHFE) reported the following warehouse receipts and changes: 1. Butadiene rubber futures warehouse receipts: 23,160 tons, an increase of 23,160 tons compared to the previous trading day; 2. Fuel oil futures warehouse receipts: 0 tons, a decrease of 201,390 tons compared to the previous trading day; 3. Tin futures warehouse receipts: 7,345 tons, a decrease of 97 tons compared to the previous trading day; 4. Nickel futures warehouse receipts: 38,424 tons, an increase of 758 tons compared to the previous trading day; 5. Low-sulfur fuel oil warehouse futures warehouse receipts: 55,230 tons, unchanged compared to the previous trading day; 6. Gold futures warehouse receipts: 97,704 kg, unchanged compared to the previous trading day; 7. Natural rubber futures warehouse receipts: 100,690 tons, an increase of 100 tons compared to the previous trading day; 8. Alumina futures warehouse receipts: 156,917 tons, an increase of 156,917 tons compared to the previous trading day; 9. Copper futures warehouse receipts totaled 90,282 tons, an increase of 8,507 tons from the previous trading day; 10. Pulp warehouse futures warehouse receipts totaled 109,576 tons, an increase of 11,089 tons from the previous trading day; 11. Pulp mill warehouse futures warehouse receipts totaled 6,000 tons, unchanged from the previous trading day; 12. Medium-sulfur crude oil futures warehouse receipts totaled 3,464,000 barrels, unchanged from the previous trading day; 13. TSR20 rubber futures warehouse receipts totaled 57,959 tons, unchanged from the previous trading day; 14. Zinc futures warehouse receipts totaled 41,374 tons, a decrease of 1,045 tons from the previous trading day; 15. Stainless steel warehouse futures warehouse receipts totaled 47,393 tons, a decrease of 304 tons from the previous trading day; 16. Rebar warehouse futures warehouse receipts totaled 56,844 tons, unchanged from the previous trading day; 17. International copper futures warehouse receipts totaled 1,053 tons, unchanged from the previous trading day; 18. Aluminum futures warehouse receipts totaled 82,796 tons, an increase of 1,127 tons from the previous trading day; 19. Silver futures warehouse receipts totaled 669,547 kg, a decrease of 22,091 kg from the previous trading day; 20. Lead futures warehouse receipts totaled 13,313 tons, a decrease of 23 tons from the previous trading day; 21. Petroleum asphalt plant warehouse futures warehouse receipts totaled 16,660 tons, unchanged from the previous trading day; 22. Petroleum asphalt warehouse futures warehouse receipts totaled 8,260 tons, unchanged from the previous trading day; 23. Hot-rolled coil futures warehouse receipts totaled 104,588 tons, unchanged from the previous trading day.On January 5th, European oil stocks opened mixed, with prices remaining relatively stable despite uncertainty. Oil prices retreated somewhat after reacting to US intervention in Venezuela, but the short-term oil market landscape appears largely unchanged. Hargreaves Lansdown analyst Matt Britzman wrote in a report, "The real question is the medium-term impact. If sanctions are eased and significant funds flow back into crumbling infrastructure, Venezuela could eventually contribute substantial supply, but this will be a long and gradual process." In individual stocks, Spains Petronas led the gains, rising nearly 2%. Italys Eni rose 0.5%, and Britains Shell edged up 0.2%. However, BP fell 0.4%, and Frances Total Energy declined 0.5%.On January 5th, European indices opened higher as traders turned to defense stocks following the US ouster of Venezuelan President Maduro. Armsmaker Leonardo surged 5.7%, and Rheinmetall jumped 6.4%, driving Italys FTSE MIB index up 0.7% and Germanys DAX index up 0.8%. In Spain, defense technology supplier Indra Systems rose 4.2%, pushing the Spanish IBEX 35 index up 0.55%. French defense company Thales rose 4%, with the countrys blue-chip index following suit, gaining 0.4%. In the UK, despite the turmoil in Venezuela, oil giants performed modestly, with Shell and BP declining slightly; however, strength in mining stocks—including Fresnillos 4.6% gain—pushed Londons FTSE 100 index up 0.4%. Additionally, semiconductor stocks drove the Dutch AEX index up 1.1%.

Gold Price Prediction: XAU / USD will continue to fluctuate above $1,900 despite a decline in US Inflation

Daniel Rogers

Mar 15, 2023 11:43

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Gold price (XAU / USD) is not in danger despite U.S. inflation figures meeting expectations. Since Monday, the precious metal has been fluctuating continuously between $1,895 and $1,913. The release of the US Consumer Price Index (CPI) failed to produce a significant reaction in the Gold price; however, the upside bias appears to be solidified as wagers on lesser rate increases from the Federal Reserve (Fed) have increased.

 

The US Dollar Index (DXY) is protecting the critical support at 103.50, but it appears vulnerable to further losses as investors' risk appetite has dramatically increased. As market participants purchased S&P500 futures in response to higher odds of a smaller rate hike from Fed chair Jerome Powell, a likely recession in the US economy was postponed, signaling an uptick in optimism.

 

Contrary to the risk-on sentiment, demand for US Treasury bonds remained weak, causing 10-year US Treasury yields to rise above 3.68 percent.

 

The headline As anticipated, the US CPI increased by 0.4% on a monthly basis, and the annual figure decreased from 6.4% to 6.0%. In addition, the core CPI, which excludes crude and food prices, decreased to 5.5% from 5.6% previously. The Fed appears to be pleased with the persistence of a declining trend in US inflation.

 

In the future, investors will closely monitor the US Retail Sales (Feb) data. Monthly Retail Sales data is anticipated to decline by 0.3% compared to the previous release of a 3.0% increase. This indicates that the consumer spending rebound is over and the Fed is on course to achieve its inflation target of 2%.