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On September 4, JPMorgan analyst Patrick Jones said that the Federal Reserves interest rate cuts that meet or exceed expectations should prompt further inflows into gold ETFs, pushing gold prices to around $3,675 per ounce by the end of the year. On this basis, gold prices should reach $4,000 in the second quarter of next year and are expected to soar to $4,250 by the end of 2026, especially if the Trump administrations attempt to remove Federal Reserve Governor Cook is successful.Mark Cabana, head of interest rate strategy at Bank of America, said the Fed is likely to cut interest rates to at least 3%. The market is underestimating the range of potential outcomes where the Fed could cut interest rates below 3%.On September 4th, Bocom International issued a report, raising its target price for NIO (09866.HK) in Hong Kong to HK$62.7 and maintaining a "buy" rating. NIOs revenue for the second quarter of 2025 was approximately RMB 19.01 billion, a 9% year-on-year increase and a 57.9% quarter-on-quarter increase. Automotive revenue was approximately RMB 16.3 billion, in line with market expectations. The company provided optimistic guidance for the third quarter, projecting deliveries of 87,000–91,000 vehicles and record-breaking revenue of RMB 21.8–22.9 billion, primarily driven by strong sales of the new L90. Looking ahead to the fourth quarter, NIO aims to achieve combined monthly sales of approximately 50,000 vehicles for NIO and Ledao, with a combined gross profit margin of 17%–18%. The bank raised its 2025 sales forecast for NIO to 340,000 vehicles and revenue by 17.5% to RMB 99.5 billion, primarily reflecting strong sales expectations for the L90 and ES8. The market believes the focus will be on the sustainability of marginal improvements, whether cost reductions will meet market expectations, and whether the company will achieve profitability in the fourth quarter. The bank believes that the sales recovery will boost market confidence and be conducive to the subsequent release of new cars and subsequent financing.Didi Chuxing (02559.HK), a Hong Kong-listed company, rose nearly 14%. Didi Chuxing announced new business developments on its 11th anniversary: the number of registered users increased to 395 million, and the number of certified car owners exceeded 19.9 million.Hong Kong-listed auto dealers fell collectively, with Harmony Auto (03836.HK) down more than 13%, Zhongsheng Holdings (00881.HK) down more than 6%, and Yongda Automobile (03669.HK) down more than 3%.

Gold Price Prediction: XAU/USD recovers to $1,700; negative potential intact

Daniel Rogers

Sep 07, 2022 16:26

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Gold extends Tuesday's retreat from a weekly high and continues to lose ground through the first half of Wednesday's trading session. The XAU/USD falls further below $1,700 for the third consecutive trading day, but stops just above the monthly low reached last Thursday.

 

The persistent purchasing of U.S. dollars remains ongoing and is a crucial element imposing downward pressure on dollar-denominated gold. In fact, the USD Index, which measures the performance of the greenback against a basket of currencies, reaches a new 20-year high in anticipation of a more aggressive Fed policy tightening.

 

In fact, current market pricing shows a probability of greater than 70% that the Fed will increase interest rates by 75 basis points at its upcoming meeting on September 20-21. The bets were confirmed by Tuesday's positive US ISM Services PMI, which caused a sell-off in the US government debt market and pushed the 30-year bond yield to its highest level since 2014.

 

In addition, the yield on the benchmark 10-year US Treasury note rose to levels not observed since June 16. This, in turn, provides extra support for the greenback and also contributes to a shift away from non-yielding gold. However, the existing risk-averse sentiment helps prevent deeper losses for the safe-haven precious metal for the time being.

 

Fears of a recession have been fueled by the likelihood of rapid interest rate increases, as well as the economic headwinds resulting from new COVID-19 restrictions in China and the ongoing conflict in Ukraine. This continues to weigh on investor sentiment, as evidenced by the generally gloomier tone on equities markets, and supports conventional safe-haven investments.

 

The flight to safety aids gold's comeback to the $1,700 round-number mark, but further recovery remains elusive. In the absence of market-moving economic releases from the United States, Fed officials' remarks will play a significant role in determining the USD's price dynamics. This could create chances for short-term trading in the commodity.

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