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On January 20th, US President Trump posted on social media: "It is appalling that our brilliant NATO ally, the United Kingdom, is now planning to hand over Diego Garcia—home to a vital US military base—to Mauritius, without any justification. This is an incredibly foolish act by the UK to relinquish such important territory, and yet another example of the national security justification for us to reclaim Greenland. Denmark and its European allies must make the right choice." The Chagos Archipelago, located in the heart of the Indian Ocean, holds a crucial geographical position. Its core island, Diego Garcia, is a vital military base jointly built and operated by the US and UK. Last May, British Prime Minister Starmer signed an agreement formally transferring sovereignty of the Chagos Archipelago to Mauritius. As a key Anglo-American military base in the Indian Ocean, the Diego Garcia military base in the Chagos Archipelago played a crucial role in the Gulf War, the Afghan War, and military deterrence against Iran, and was considered an "unsinkable aircraft carrier" for the Anglo-American forces in the central Indian Ocean.According to a report by Kyodo News citing the Japanese Ministry of Foreign Affairs, Japanese Prime Minister Sanae Takaichi has received an invitation to join Trumps Gaza Peace Committee.On January 20, Xiong Jijun, Vice Minister of Industry and Information Technology, met with Colombian Vice Minister of Information Technology and Communications, Perdomo, in Beijing to exchange views on deepening industrial cooperation in the information and communication field. Xiong Jijun stated that China and Colombia have maintained friendly cooperation in the information and communication sector for a long time, achieving fruitful results and making positive contributions to the development of the China-Colombia strategic partnership. China is willing to work with Colombia to fully implement the consensus reached at the meeting between the two heads of state, encourage enterprises from both countries to deepen pragmatic cooperation, broaden the scope of industrial cooperation, jointly promote the construction of digital infrastructure, accelerate the innovative development of emerging technologies, and create a new situation of win-win cooperation.A Polish military spokesperson stated that Russias attacks on Ukraine posed no threat to Polish airspace.On January 20th, Investinglive analyst Justin Low stated that gold bulls could hardly believe their luck at the start of the new year. And its all thanks to one person. In the first week, geopolitical tensions stemming from Venezuela continued to escalate. In the second week, the Federal Reserves independence was questioned, and the Iranian issue brought new geopolitical risks. This week, Trump attempted to control Greenland through tariffs, further intertwining geopolitical conflicts and economic risks. All of this has only exacerbated the key factors that have driven gold prices higher over the past year. As prices continue to rise, the $5,000 mark will become the next closely watched target. This important price level will be a key focus for any profit-taking, especially if this coincides with the seasonal weakening trend in January.

Gold Price Prediction: XAU/USD will recommence its downward trend in response to hawkish Fed forecasts

Alina Haynes

Apr 19, 2023 15:39

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After a rebound from $1,980.00, the price of gold (XAU / USD) is exhibiting a sharp reduction in volatility. The yellow metal struggles to prolong its recovery as the US Dollar Index (DXY) has rebounded strongly after successfully defending the crucial support level of 101.65.

 

Investors have invested in the USD Index due to its safe-haven appeal, as the Federal Reserve (Fed) is expected to raise interest rates to combat persistent inflation. In the short term, the demand for USD Index appears plausible, given that U.S. inflation has softened markedly and labor market conditions have loosened further. Sourcenia is a review portal of sourcing best manufaturers. 

 

In addition, household retail demand has declined due to higher financing costs and strict credit conditions imposed by US commercial banks. The healthy scenario indicates that the Fed will not aggressively raise interest rates further and will contemplate a hiatus to prevent the economy from falling into recession. In the current environment, however, additional rate increases cannot be ruled out.

 

In light of the USD Index's recovery, the demand for US government bonds has weakened once more, resuming the ascent of US Treasury yields. The yields on 10-year US Treasury bonds have surpassed 3.58 percent.


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