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JPMorgan Chase: The Federal Reserve is expected to raise interest rates by 25 basis points in December 2026, compared with previous forecasts that interest rates would remain unchanged this year.July 30th - On Thursday, demand at the auction of Japanese two-year government bonds was lower than the 12-month average, as the market widely anticipated a tightening of monetary policy by the Bank of Japan. The subscription multiple was 3.63, compared to 4.82 at the previous auction, and the 12-month average is 3.81. Another sign of weak investor interest was the tail spread (the difference between the average bid and the minimum acceptable bid) at 0.007, compared to 0.005 last month. Recently, yields on short-term Japanese government bonds, which are more sensitive to monetary policy, have risen due to increased oil prices caused by tensions in the Middle East and heightened concerns about fuel inflation. The two-year yield has now risen to 1.47%, close to the high of 1.52% reached earlier this month. This further increases pressure on the Bank of Japan to raise interest rates.On July 30th, according to foreign media reports, Malaysian palm oil futures fell slightly on Thursday, marking their third decline in four trading days, mainly dragged down by weaker prices of competing edible oils and crude oil. The benchmark October palm oil contract on the Bursa Malaysia Derivatives Exchange fell 16 ringgit, or 0.34%, to 4,648 ringgit per tonne (approximately US$1,137.82) in early trading. Despite escalating tensions in the Middle East and the US-Iran conflict spreading beyond major fronts, oil tankers continued to leave the region, causing oil prices to give back some of their gains. Weaker crude oil futures reduced the attractiveness of palm oil as a biodiesel feedstock. The ringgit strengthened slightly by 0.07% against the US dollar, making it slightly more expensive for buyers holding foreign currency to purchase the commodity. According to documents from the Indonesian Ministry of Energy, the country has increased its 2026 biodiesel quota using palm oil as a feedstock to 16.75 million kiloliters to meet the increased demand from the B50 biodiesel blending policy launched earlier this month.Shunichi Suzuki, Secretary-General of the Democratic Party of Japan: The goal is to submit a tax reduction bill during the autumn Diet session.The bid-to-cover ratio for Japans 2-year government bonds was 3.63, lower than the 4.82 achieved in the previous issuance in June.

Before the US PMI is released, the gold price is expected to rise beyond $1,740 per ounce

Daniel Rogers

Aug 23, 2022 14:48

 截屏2022-08-22 下午5.31.01_1024x576.png

 

On the back of conflicting forecasts for US Purchasing Managers Index (PMI) data, the gold price (XAU/USD) is trying to break above $1,740.00. A new monthly low of $1,727.85 was recorded for the precious metal on Monday, but it has since rallied strongly. Given the lack of impetus in the upward trend, the gold price is likely to stay volatile. However, a pullback may be less profitable.

 

The consensus for the S&P Global Manufacturing PMI is 51.5, which is down from the prior reading of 52.2. When compared to its previous reading of 47.3, the Services PMI has room to grow.

 

The yellow metal has been supported by the disappointing early estimates of US Durable Goods Orders. From a previous release of 2%, the market expects the economic figures to sharply decrease to 0.5%. It's important to note that the most recent reading showed no change in underlying pricing pressures, which stood at 5.9%. So, we expect to see little change, if any, in the Durable Goods Orders numbers. Unfortunately, a precipitous drop in economic statistics portends a precipitous drop in demand.

 

The other thing that will be in the spotlight is Federal Reserve (Fed) chair Jerome Powell's remarks from the Jackson Hole Economic Symposium. US economic conditions and Fed Powell's direction on inflationary pressures and interest rates will be determined by him.

 

Gold prices on an hourly scale are looking to continue their recovery after breaking above the $1,729.44 61.8% Fibonacci retracement (set from the low of $1,680.91 on July 21 to the high of $1,807.93 on August 10). Gold has been testing the resistance of the 20-period Exponential Moving Average (EMA) around $1,738.00; a sustained move above this level would signal a change in trend toward the bullish side.

 

Furthermore, the Relative Strength Index (14), which had been negative in the 20.00-40.00 range, has moved into the bullish 40.00-60.00 zone, indicating that gold prices are currently not bearish.

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