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The Federal Reserve accepted a total of $105.993 billion from 49 counterparties in its fixed-rate reverse repurchase operations.On January 1st, JPMorgan Chase stated that the US labor market has cooled after a year of economic and financial market turmoil, and is expected to show a slowdown at the start of 2026 followed by a gradual improvement in the second half. A forecast report released earlier this month by the bank indicated that the weakening momentum in job growth in 2025 can be attributed to business uncertainty caused by tariffs and trade policies. Economist Michael Ferroli stated, "Therefore, businesses continue to face difficulties in both long-term and short-term planning, with both layoff and hiring rates remaining low. When businesses lack confidence in the situation over the next six months, they tend to be cautious about large-scale increases or decreases in staff." Furthermore, the Trump administrations immigration controls and deportations have been more stringent than expected. The reduced labor supply, coupled with a relatively stable labor force participation rate, means that the monthly job creation needed to maintain a stable unemployment rate may plummet from 50,000 to just 15,000. Although the rate of job growth is slowing, the unemployment rate is expected to continue to rise gradually.U.S. Special Envoy Witkov: Focus on how to advance discussions on ending the Russia-Ukraine conflict, including strengthening security guarantees and developing a de-escalation mechanism.According to sources and shipping data, Venezuela’s remaining fuel stocks are nearing capacity limits as exports have almost come to a standstill.EIA Natural Gas Report: For the week ending December 26, total U.S. natural gas inventories were 3.375 trillion cubic feet, down 38 billion cubic feet from the previous week and down 55 billion cubic feet from the same period last year, a year-on-year decrease of 1.6%, while 58 billion cubic feet higher than the 5-year average, an increase of 1.7%.

Gold Treads Water Pending Additional Fed Hints

Haiden Holmes

Feb 21, 2023 11:27

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Gold prices hovered slightly around six-week lows on Tuesday, as traders waited for more monetary policy clues from the Federal Reserve's February meeting minutes before placing large wagers.


This week, markets were also anticipating a spate of Fed speakers, as hot U.S. inflation and a robust labor market put the central bank's policies in the spotlight.


Although U.S. markets were closed on Monday for a holiday, trading on gold and other metals has been limited so far this week. The continued demand for the dollar in Asian and European trade capped the price of metal.


At 20:32 ET, spot gold was unchanged at $1,841.59 per ounce, and gold futures were slightly changed at $1,850.25 per ounce (01:32 GMT). Both assets have suffered three consecutive weeks of losses.


Hotter-than-expected The recent gain in gold prices was abruptly halted by the U.S. inflation data as investors sharply reviewed their expectations for interest rate hikes this year.


The Fed has sufficient motivation to continue to raise interest rates due to persistent inflation and indicators of a robust labor market. Wednesday's release of the minutes from the Fed's February meeting is expected to confirm the central bank's hawkish position.


An increase in U.S. Treasury yields and the value of the dollar weighted hard on non-yielding assets such as gold and other metals. With U.S. yields and interest rates expected to grow further in tandem, the near-term picture for gold remained bleak, as Fed officials cautioned that U.S. interest rates could surpass 6% this year.


Gold and other precious metals could profit from safe-haven buying later in the year, particularly if slower economic growth pushes the Federal Reserve to reverse its hawkish strategy.


On Tuesday, prices for other precious metals were modest. Futures for platinum increased 0.2% to $929.40 per ounce, while futures for silver decreased 0.2% to $21.780 per ounce.


Copper prices declined marginally on Tuesday, following a 1.5% increase in the previous session, despite persistent optimism on China's economic rebound.


Futures for high-grade copper dipped 0.1% to $4.1730 per pound.


Monday's decision by the People's Bank to maintain historically low mortgage rates bolstered optimism for a Chinese economic revival. Although the action was widely anticipated, it showed that the administration intended to maintain accommodating policies to stimulate economic growth.

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