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Russian Ministry of Defense: Air defense system shot down 45 Ukrainian drones overnight.Silver prices have hit record highs recently. Data from the Korea Gold Exchange showed that on October 17th, the price of silver reached 2,467 won (approximately 12 yuan) per gram, a year-to-date increase of nearly 70%, exceeding the increase in gold over the same period. This surge in demand for silver among South Korean investors has led to tight market supply. So far this year, major South Korean commercial banks have generated cumulative silver bar sales of 10.4 billion won (approximately 52.08 million yuan), 13 times higher than the same period last year. Due to the shortage of silver bars in the market, South Korean commercial banks and major precious metals sales platforms have announced that they will suspend silver bar sales starting on the 20th of this month.1. October 24th – Federal employees, whether furloughed or working, will miss their first full paycheck, forcing lawmakers to act. They have already missed partial paychecks, placing significant financial strain on over 2 million employees and their families. 2. October 31st – The Trump administration this week deployed $8 billion in unused research and development funds from fiscal year 2025 to ensure 1.3 million active-duty military personnel receive their October 15th paycheck. However, whether this can be done again before Halloween (November 1st) remains uncertain. 3. October 31st and November 5th – Senate clerks will miss their first full paycheck on October 20th (paid on the 5th and 20th of each month). House clerks will miss their paychecks at the end of October (paid at the end of each month) and, if they do, will not receive their paychecks until after Thanksgiving, creating significant financial hardship. 4. November 1st – Open enrollment for the Affordable Care Act. Healthcare is a primary concern for the shutdown, with Democrats aiming to pressure Republicans to reach an agreement on strengthening subsidies for Obamacare before open enrollment begins. 5. November 21 – If the shutdown continues into late November, it could lead to TSA staffing shortages and air traffic control issues for Americans during the busy Thanksgiving travel week. Air traffic control chaos in early 2019 was a key factor in forcing the government to end the longest shutdown in history.On October 19th, local time, Pakistani Deputy Prime Minister and Foreign Minister Dar welcomed the ceasefire agreement reached between Pakistan and Afghanistan in Doha, Qatar, on the evening of the 18th on social media, calling it "the first step in the right direction." Dar also expressed hope that at the next round of meetings hosted by Turkey, a concrete and verifiable monitoring mechanism would be established to address the threat of attacks from Afghanistan into Pakistan. On the same day, Afghan government spokesman Zabiullah Mujahid issued a statement announcing that negotiations between Afghan and Pakistani representatives in Qatar had concluded with the signing of a bilateral agreement. Neither side will take any hostile actions against the other, nor will they support groups that attack the Pakistani government. Both sides will refrain from targeting each others security forces, civilians, or critical infrastructure. A mechanism will be established to review bilateral positions and ensure the effective implementation of the agreement, mediated by an intermediary.The General Staff of the Ukrainian Armed Forces: In the past day, the Russian army lost about 1,000 soldiers, as well as 3 armored personnel carriers, 45 artillery systems and other equipment.

The XAU/USD pair attempts to regain $1,730 prior to Fed Chair Powell's address

Alina Haynes

Sep 08, 2022 16:58

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Gold price (XAU/USD) gains bids to reestablish intraday high at $1,718 as the US dollar retreats ahead of Thursday's big events. In doing so, the yellow metal extends yesterday's recovery from the one-week low amid weaker yields and a mixed risk profile.

 

US 10-year Treasury yields extend Wednesday's fall from the highest levels since mid-June to 3.23%, which weighs on the US Dollar Index (DXY), which retreats to 109.50, extending yesterday's losses from the 20-year high.

 

The recent decline in yields may be attributable to the market's rush into bonds prior to the crucial European Central Bank (ECB) Monetary Policy Meeting and Fed Chair Jerome Powell's speech. However, rumors about Japan's probable involvement to preserve the home currency via the bond market appear to have depressed yields.

 

Due to Beijing's role as one of the world's largest gold buyers, contradictory news from China should have also contributed to the XAU/USD's comeback.

 

Three persons with knowledge of the situation were cited by Reuters when they reported encouraging news for China's property sector. Reuters said that "Zhengzhou pledged to restart all halted housing projects within 30 days by utilizing special financing, requiring developers to refund misused funds, and encouraging certain real estate businesses to file for bankruptcy."

 

Nonetheless, the risk-negative news regarding covid and Taiwan appeared to impose downward pressure on metal prices. The South China Morning Post (SCMP) previously reported, "Shenzhen lowers Hong Kong visitors' admission quota." Reuters' report that Taiwan and the United States are preparing for closer ties further dampens the mood.

 

While reflecting market sentiment, S&P 500 Futures post modest gains, whilst Asia-Pacific equities remain divided.

 

In conclusion, the ECB's 75 bps rate hike can limit a short-term decline in the XAU/USD before a new decline, if Powell sounds hawkish. As the ECB's ability to tighten monetary policy is restricted compared to the Fed's, the gold price is likely to remain in the bears' sights. Also, economic concerns originating from Europe are not ruled out, giving gold bears cause for optimism.