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Blackstone Group (BX.N) shares fell 1.7% in pre-market trading after announcing its first-quarter results.On April 23, Berenberg Bank stated that the UK PMI was unexpectedly strong, suggesting that the UK economy may maintain some growth momentum in the second quarter. However, it also means that the Bank of England may have to raise interest rates to prevent inflation. If further evidence from the Bank of Englands policymaking panel confirms downward pressure on wages, this could prompt the bank to raise interest rates next week.On April 23, Berenberg Bank stated that the war with Iran is exacerbating inflationary pressures in the Eurozone, and the European Central Bank (ECB) is closely monitoring the situation. PMI data shows that input costs and output prices both rose at their highest levels in over three years in April. The extent to which these costs are passed on to consumers varies, with Germany experiencing a more pronounced effect than France. At next weeks meeting, the ECB is likely to keep its key interest rate unchanged. However, if the conflict escalates further, causing high input costs to be directly or indirectly passed on to consumer prices, the pressure on the ECB to raise interest rates will increase.According to LESG data, European companies are expected to report first-quarter earnings growth of 3.2%, higher than the 2.8% growth forecast a week ago. European companies expect first-quarter revenue growth of 0.4%, unchanged from the forecast a week ago.Barclays lowered its price target for Boston Scientific (BSX.N) to $96 from $100. It raised its price target for Texas Instruments (TXN.O) to $250 from $175.

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

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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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