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The UKs December construction PMI came in at 40.1, below the expected 42.5 and the previous reading of 39.4.On January 7th, strategists at RBC Capital Markets noted in a report that the UK Debt Authoritys scheduled auction of £4.25 billion in government bonds maturing in March 2031 at 10:00 GMT is expected to attract strong interest. They stated, "The smaller auction size, coupled with the recent rebound in valuations and the resulting relative value investing interest, should result in a reasonably well-performing auction." Tradeweb data shows that the yield on UK government bonds maturing in March 2031 fell 3.5 basis points, ultimately closing at 4.002%.January 7th - The steepening trend of the US Treasury yield curve – the widening spread between short-term and long-term Treasury yields – continues. While the yield curve has seen occasional interruptions in recent months, it has generally steepened. Analysts at First Abu Dhabi Bank noted in a report that short-term Treasury yields have remained stable amid concerns about stagflation risks, while long-term yields have fluctuated upwards. They stated that since the deep inversion in mid-2023, the spread between two-year and ten-year Treasury yields has steepened by approximately 170 basis points. According to Tradeweb data, the spread between two-year and ten-year Treasury yields is currently 70 basis points, having briefly reached a high of 71 basis points earlier this month.The new chief of staff of Ukrainian President Zelensky said that the second day of the Paris talks yielded "concrete results".Kuang-Chi Technologies: The company recently received a notification from its wholly-owned subsidiary, Kuang-Chi Advanced, that Kuang-Chi Advanced has signed a batch production contract for metamaterial products totaling RMB 215 million with a customer, and signed batch production contracts for metamaterial products totaling RMB 49.58 million with three other customers.

Gold Price Prediction: XAU/USD anticipates additional gains ahead of China and U.S. inflation

Alina Haynes

Jan 11, 2023 11:54

Gold price (XAU/USD) demonstrates usual pre-data concern as it approaches $1,875 on Wednesday morning, exploring a three-day rally around the highest levels since May 2022. In doing so, gold demonstrates the market's faith in the traditional safe-haven, even if the US Dollar recovers from its multi-day low. The uncertainty surrounding the next steps of the US Federal Reserve (Fed) and the pessimistic economic forecasts of the World Bank (WB), not to mention cautious optimism towards China, may be to blame.

 

Federal Reserve (Fed) Chair Jerome Powell's remarks at Riksbank's International Symposium on Central Bank Independence were unable to provide additional clarification on the US central bank's monetary policy outlook, which prompted a stampede for gold in the face of uncertainty. In his most recent public appearances, the policymaker lauded the US central bank's latest steps while emphasizing the Fed's independence and lack of commitment to climate control. Notably, Federal Reserve Governor Michelle Bowman seemed hawkish when she stated that additional rate hikes are required to combat excessive inflation, which should have pressured the XAU/USD bulls in the aftermath.

 

Notably, the recent softening of hawkish bets on the Fed's next moves, as well as lower US data, appear to keep gold investors optimistic, despite the Federal Reserve's efforts to defend its tight monetary policy. Tuesday, the US NFIB Business Optimism Index for December fell to its lowest level since 2013 if various anxieties caused by the worldwide Covid wave are disregarded. In addition, US Wholesale Inventories for November stayed constant at 1.0% growth.

 

Alternatively, a rebound in the US Dollar Index (DXY) from the seven-month low appears to pose a threat to the Gold price, due to the inverse link between the XAU/USD and the dollar's index against the six main currencies. Tuesday marked the conclusion of a two-day downturn for the DXY as it rebounded from the multiday low to settle at 103.30. In doing so, the US Dollar Index tracked the firmer US 10-year Treasury note yields, which increased 10 basis points (bps) to 3.61 percent, falling one basis point (bp) to 3.60 percent at the latest.

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