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On May 19th, international gold and silver prices were sold off due to market bets on a Federal Reserve rate hike this year triggered by better-than-expected US inflation data. While the Shenzhen Shuibei Gold and Jewelry Market remained bustling, the sharp price fluctuations affected consumer willingness to trade, and many merchants adjusted their business strategies accordingly. One store manager stated, "Sales have dropped significantly, down by about 50% year-on-year. Weve gone back to wholesale. Gold transactions are low, and silver has seen a precipitous drop; investors are basically not coming anymore." In contrast to the sluggish retail market, the processing of gold and silver products has been very active recently. The head of a processing company told reporters that their business volume has increased significantly compared to the same period last year, with many customers no longer frequently buying and selling their existing gold and silver products, instead focusing on processing and planning to hold them long-term.A spokesperson for the Qatari Ministry of Foreign Affairs stated that only two liquefied natural gas tankers passed through the Strait of Hormuz, which clearly does not mean that normal navigation has resumed.On May 19, Ding Xuexiang, member of the Standing Committee of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, met with Russian First Deputy Prime Minister Manturov in Beijing. Ding stated that under the strategic guidance of President Xi Jinping and President Putin, relevant parties in China and Russia have worked together to maintain a good momentum of investment cooperation between the two countries. This year marks the 30th anniversary of the establishment of the China-Russia strategic partnership of coordination and the 25th anniversary of the signing of the Treaty of Good-Neighborliness and Friendly Cooperation between China and Russia. Both sides should take this opportunity to further implement the important consensus reached by the two heads of state, leverage the coordinating role of the China-Russia Investment Cooperation Committee, steadily advance key projects, expand cooperation areas, achieve more practical results, and continuously inject strong impetus into the development of bilateral relations. Manturov stated that Russia is willing to strengthen strategic alignment with China, enrich the content of cooperation, actively address issues of mutual concern, and continuously improve the level of investment cooperation between the two countries.Shell CEO: Events of the past few months demonstrate that meeting oil demand will be crucial in the coming decades.Indian oil company executive: The companys crude oil inventory exceeds one months supply.

XAUUSD is expected to stay under pressure due to expectations of 75 basis points from the Fed, according to ANZ

Daniel Rogers

Jul 18, 2022 12:01

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What main factors influence the price of gold? The yellow metal will be under pressure due to tighter monetary policy and an increase in the value of the US dollar. The demand for gold as a safe haven, however, may be supported by rising geopolitical risk and worries of a global recession, according to ANZ Bank experts.

 

"US inflation reached a 41-year high of 9.1% in June, but gold's role as an anti-inflation hedge was insufficient to allay worries about greater monetary tightening by central banks. Interest rates would increase to 2.25 percent by the end of July and 3 percent by the end of September if the Fed raises rates by 75 basis points over the course of the next two meetings. A trajectory this steep will be detrimental to gold price growth. This pessimism can be countered by the deteriorating economic prospects.

 

"The 2s/10s yield curve is now more inverted, which typically signals the beginning of a recession. Rising geopolitical uncertainties and a decline in asset prices may also be supportive. Additionally, the US dollar is probably going to weaken near the end of the year, which will help gold. We anticipate that the price of gold will bottom out around $1,700.


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