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March 11 – Due to persistent inflationary pressures, two major Australian banks expect the Reserve Bank of Australia (RBA) to raise interest rates for the second consecutive week. National Australia Bank (NAB) and Westpac predicted on Wednesday that the RBA will raise rates by 25 basis points to 4.1% next week, in line with expectations from UBS and Deutsche Bank. NAB Chief Economist Sally Auld stated, “Given Australia’s relatively unfavorable inflation starting point and recent data confirming that the economy is running well above trend growth, the rationale for a rate hike in the near term is clear.” Westpac Chief Economist Luci Ellis said that the RBA’s belief that demand continues to exceed economic capacity and its willingness to address surging overall inflation to prevent a sustained rise in price expectations prompted her to change her forecast. Ellis stated, “There could be disagreements at next week’s meeting. Market participants should consider the possibility that the RBA might choose to wait until May to raise rates, but this is no longer our base case scenario.”March 11 (Kyodo News) – Japanese Economy, Trade and Industry Minister Ryosuke Akazawa stated on Wednesday during a parliamentary committee meeting, in response to questions from lawmakers, that the Japanese government has not ruled out the possibility of releasing national oil reserves "on its own initiative," rather than as part of a coordinated action. He added, "We will take all possible measures to ensure a stable energy supply." As of the end of December, Japans total oil reserves were sufficient to meet domestic consumption needs for 254 days, of which 146 days worth were held by the government, 101 days worth were held by the private sector, and the remainder were stored jointly with oil-producing countries.Market news: The Saudi Foreign Minister spoke with the US Secretary of State to discuss Irans regional aggression.Piper Jaffray: Lowered its target price for Oracle (ORCL.N) from $240 to $210.According to Israeli media reports, Iran launched two missiles at Israel.

Gold price reaches a new YTD low as bears watch for a sustained breach below $1,700

Alina Haynes

Jul 15, 2022 11:41

 截屏2022-06-07 下午5.15.00.png

 

The gold price struggled to build on the day before's moderately successful advance higher from the $1,707 region and experienced fresh selling pressure on Thursday. The XAUUSD fell during the early North American session and reached its lowest point since August 2021 as a result of the intraday decline. Bears are still looking for a sustained breach below the $1,700 threshold.

 

The likelihood of a more aggressive Federal Reserve policy tightening caused the US dollar to resume its unrelenting ascent, reaching a new two-decade high. The dollar-denominated gold was under severe downward pressure as a result of the higher USD, which was considered to be a crucial cause. The headline US CPI increased to 9.1 percent in June, the highest level since November 1981, according to the US Labor Department. The information made a strong argument for yet another massive Fed rate rise and further supported the dollar.

 

After Atlanta Fed President Raphael Bostic indicated on Wednesday that everything is on the table to stop the ongoing rise in inflationary pressures, the rates on US Treasury bonds increased. The benchmark 10-year US government bond yield was quickly pushed back around the 3.0 percent level as the markets began pricing in the potential of an unprecedented 100 basis point rate rise later this month. Increased US Treasury bond yields also had a role in reducing demand for gold's lack of income.

 

The US Producer Price Index (PPI) report on Thursday, which significantly outperformed forecasts, confirmed hawkish Fed views. According to data released by the US Bureau of Labor Statistics, the gauge for final demand items increased to 11.3 percent on an annual basis in June, defying consensus predictions that it would have slightly decreased to 10.7 percent from 10.9 percent in May. An increase in US Weekly Initial Jobless Claims to their highest level since November 2021 was somewhat countered by this, to a greater extent.

 

For the time being, the price of gold has been able to maintain itself above the $1,700 level, which is considered as a support level and, if broken strongly, as a new trigger for bearish traders. The XAUUSD might then continue to decline and test the low point from September 2021, which is in the $1,787–$1,786 range. The negative trend might continue all the way to the 2021 annual low, which is about $1,677–1,676.

 

On the other hand, the overnight swing high, located around $1,745 currently appears to operate as a powerful immediate barrier in front of the supply zone between $1,749 and $1,752. A rise towards the $1,767–$1,770 strong horizontal support breakpoint might be initiated by further strength above, at which time bulls may try to retake the $1,800 round-figure level.


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