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The SC crude oil futures contract hit its daily limit down, falling 7.02% to 449 yuan per barrel.On February 2nd, Futures News reported that during this pricing cycle, the US continued to exert pressure on the Middle East, escalating geopolitical tensions and raising market concerns about potential oil supply disruptions following conflict. Consequently, a significant geopolitical premium was observed in crude oil prices. Furthermore, extreme cold weather in the US caused substantial production losses and a prolonged recovery period. Coupled with the slower-than-expected recovery of oil fields in Kazakhstan, a temporary supply shortage emerged, further driving up crude oil prices. WTI crude oil, after stabilizing above $60/barrel, broke through the $65/barrel mark again. Correspondingly, the crude oil price change rate rose within a positive range, indicating another increase in retail prices for refined oil products—the first "two consecutive increases" in 2026. According to Zhuochuang Informations calculations, as of the close of trading on January 30th, the domestic reference crude oil price change rate for the 9th working day was 5.32%, with gasoline and diesel prices expected to increase by 230 yuan/ton. The price adjustment window will open at 24:00 on February 3rd.On February 2nd, Maybank analysts stated that Trumps nomination of Kevin Warsh to lead the Federal Reserve provided the necessary trigger for the market to unwind extreme positions. Their report stated, "This nomination alleviated market concerns that Trumps nominee might be a staunch supporter, as such a candidate could excessively lower policy rates at the expense of increasing inflation risks." Warsh has been a critic of the Fed, arguing that it should only be responsible for price stability. His unexpected nomination prompted market participants to abandon their arguments for a weaker dollar, leading to a sharp drop in gold, silver, and copper after their significant gains in January. However, Maybank indicated that the price action suggests the likelihood of a more dramatic reversal remains relatively low, with resistance expected at 97.50.Keidanren, Japans largest business lobbying group, invited activist investor Elliott Management to a private meeting on March 5.Samsung SDI: Will begin supplying batteries for hybrid vehicles.

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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