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September 18th - Nikkei futures extended gains as the yen weakened after the Bank of Japan raised its policy rate by 25 basis points to 1.25%, a move widely expected. The Bank of Japan stated that underlying inflation is approaching its 2% target and that it will closely monitor Middle East conflicts, the yens exchange rate, and demand for artificial intelligence. Investors are now focused on Governor Kazuo Uedas press conference later on Friday for clues about the pace of future rate hikes.Following the Bank of Japans interest rate hike, gains in benchmark 10-year Japanese government bond futures narrowed, with the latest increase being 0.22 yen.On September 18th, Goldman Sachs maintained its year-end gold price forecast of $5,400/oz. Goldman Sachs stated that while the latest US interest rate hike may slow golds rise, it will not change its long-term bullish outlook. In its report, Goldman Sachs expects "the impact of tighter monetary policy to primarily manifest as a slowdown in the short-term appreciation path of gold, rather than a decline in the final gold price"; the continued diversification of reserves by central banks remains the main structural driver for its bullish outlook on gold. Goldman Sachs pointed out that if the Federal Reserve adopts a more hawkish policy, gold may experience a more significant correction. If the Fed raises interest rates three more times this year and signals further increases in final interest rates, gold prices could fall to around $4,070/oz; however, with central banks continuing to purchase gold to support the market, gold prices are expected to rebound to around $4,200/oz by the end of 2026.On September 18th, Barclays revised its forecast for the Bank of Englands monetary policy, now expecting a 25 basis point rate hike in November. The bank stated that signals from Bank of England policymakers following Thursdays meeting indicated heightened concerns about inflation risks.AirAsia Group co-founder: The Middle East war cannot last much longer.

Gold Price Prediction: XAU/USD soars above $1,780 amidst a turbulent US Dollar; US CPI in the focus

Daniel Rogers

Dec 13, 2022 12:07

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Gold price (XAU/USD) rebounded after falling below the critical level of $1,780.00 during the Asian session. The precious metal had a significant decline on Monday as investors anticipate the Federal Reserve (Fed) to signal a higher interest rate peak for CY2023.

 

A resurgence in the price of gold is contingent on an improvement in risk appetite. The US Dollar Index (DXY) has fallen below 105.00 in early trading, and further losses are anticipated in the days ahead. On Monday, S&P500 futures rebounded well as investors shrugged aside the uncertainty caused by inflation predictions. Yields on 10-year US Treasuries have under pressure and fallen below 3.60 percent as the Fed is very likely to signal a pause in future interest rate hikes.

 

A fall in one-year consumer inflation forecasts in the United States has also diminished consensus on casual inflation statistics. In November, the economic data decreased to 5.2% from 5.9% in October, marking the largest one-month loss on record. The headline inflation rate is anticipated to decline to 7.3% from 7.7%.

 

Analysts at JP Morgan Chase & Co. believe that a weak reading of the United States Consumer Price Index (CPI) might unleash a significant surge in U.S. stocks. Bloomberg reports that the 500-stock index of the United States might gain up to 10% if headline inflation falls to 6.9% or less.

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