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The Ukrainian military says it attacked an oil refinery in Russia’s Saratov region last night.On March 21, He Lifeng, member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, met with executives from renowned multinational corporations including HSBC, UBS, Louis Dreyfus, Siemens Healthineers, Schneider Electric, Rio Tinto, Prudential, Investor Services, Standard Chartered, Syzygium, and T.C. Pharmaceutical Industries at the Diaoyutai State Guesthouse. He Lifeng stated that Chinas economy is currently progressing steadily and towards new and better development. During the 15th Five-Year Plan period, China will unswervingly expand high-level opening-up and promote high-quality development, which will create broader market opportunities for multinational corporations. He welcomed multinational corporations to increase their investment in China and continuously deepen mutually beneficial cooperation.On March 21, a spokesperson for the Hatem Anbia Central Headquarters of the Iranian Armed Forces stated that the United States and Israel are now targeting private vessels and passenger transport in the Persian Gulf. The Iranian Armed Forces warned the US and Israel that if such actions occur again, Iran will take strong and reciprocal retaliatory action.On March 21, local time, the Iranian Islamic Revolutionary Guard Corps issued a statement saying that at 3:45 a.m. that day, Irans new air defense system struck down Israels third F-16 fighter jet in central Iran. It is claimed that in the first three weeks of the conflict, Iran successfully intercepted and destroyed more than 200 aircraft, including drones, cruise missiles, refueling aircraft, and top-tier fighter jets.On March 21st, HSBC stated that the Federal Reserve maintained its policy rate at 3.50%-3.75% at its March meeting, hinting at a "wait-and-see" approach. Persistent inflation and rising geopolitical risks have created uncertainty for the Fed. We maintain our previous view that the Fed will keep rates unchanged in 2026 and 2027. Inflation risks have increased, particularly due to soaring energy prices, while labor market risks have slightly decreased. Energy price volatility and geopolitical risks should continue to support safe-haven demand and a stronger dollar.

Gold Price Prediction: XAU/USD declines near $1,750 as risk aversion anticipates NFP data release

Alina Haynes

Aug 02, 2022 15:03

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During Tuesday's opening European session, the gold price (XAU/USD) deepens its retreat from a nearly three-month-old resistance line, falling below $1,773. In spite of this, the precious metal exhibits a five-day rise around the greatest levels since July 5.

 

The metal's early-day rally may have been influenced by a broad dollar decline and Treasury rates. The XAU/USD exchange rate afterwards looked to have been influenced by China-related news and rising worries of an economic downturn.

 

Nonetheless, the visit of US House Secretary Nancy Pelosi to Taiwan and the probable difficulties for Chinese chipmakers as a result of the U.S. consideration of banning supplies of American chipmaking equipment further weigh on market mood. Similarly, a Chinese media story may indicate that the dragon country is prepared for a military exercise in Bohai, South China Sea.

 

In addition, Bloomberg's report that Beijing's Gross Domestic Product (GDP) has no fixed limits tends to dampen the market's risk appetite. People acquainted with the situation were quoted in the press as saying, "China's top leaders instructed government officials last week that this year's economic growth objective of "about 5.5 percent" should serve as guideline rather than a mandatory aim."

 

It should be emphasized that China is one of the world's largest users of gold, and that bad news stories about the country might impact on gold prices.

 

Elsewhere, the recently poor US PMIs mirrored last week's US Gross Domestic Product (GDP) for the second quarter to illustrate economic anxiety. Fed Chair Jerome Powell's veiled warnings that the hawks are losing steam might also dampen sentiment.

 

As a reflection of market mood, equities in the Asia-Pacific region and US stock futures see modest losses. However, the US 10-year bond yield decreases 5.5 basis points (bps) to 2.55 percent at the latest, threatening the gold bears via the weakening US dollar. In spite of this, the US Dollar Index (DXY) reestablished the monthly minimum before rebounding from 105.00.

 

The news concerning China and the recession, as well as the remarks of Chicago Fed President Charles L. Evans and Federal Reserve Bank of St. Louis President James Bullard, will be crucial for intraday gold dealers in the future.


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