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On May 19th, Capital Economics economists stated that although the Japanese economy had accumulated solid growth momentum before the Iran war, GDP growth is expected to stagnate this quarter and next. Capital Economics economist Marcel Tiliant pointed out that first-quarter data showed both household spending and business investment increased quarter-on-quarter, with a significant increase in exports exceeding a smaller increase in imports, providing impetus for economic growth. However, despite market speculation that fiscal policy under Prime Minister Sanae Takaichi would become more accommodative, government consumption slowed quarter-on-quarter, highlighting that the supplementary budget announced last November had not had a substantial impact on government spending. Meanwhile, consumer confidence declined sharply, and the fuel price cap only temporarily curbed inflation. Tiliant added that even if the Japanese government compiles a new supplementary budget to fund gasoline subsidies, it will at best only stabilize consumer spending.Reserve Bank of Australia meeting minutes: Previously anticipated that long-term inflation expectations could get out of control.Reserve Bank of Australia meeting minutes: The committee had previously considered whether to raise interest rates by 25 basis points or keep the rate at 4.10%.Tencent Music (01698.HK) shares rose more than 5% after the company announced the completion of its acquisition of Himalaya.Reserve Bank of Australia meeting minutes: The Committee will take necessary measures to meet its inflation and employment targets.

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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