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On January 20th, Fitch Ratings stated that after three years of economic stagnation, impacted by external shocks and increasingly severe structural challenges, Fitch forecasts significant fiscal easing will drive the German economy back to growth in 2026. Despite risks regarding public spending implementation and private sector response, there is evidence that investment is recovering from its slump. Charles Seville, Senior Director of Fitchs Economics Team, said, "German capital spending has shown signs of recovery, with real investment returning to annual growth for the first time in three years." The construction sector, which accounts for about half of fixed asset investment, returned to positive year-on-year growth in October. Driven by civil engineering and public works activities, the construction purchasing managers index returned to expansion territory in December for the first time since the beginning of 2022. Furthermore, industrial output, survey data, and order volumes also showed signs of recovery. Industrial output recorded year-on-year growth in November, the only second increase since mid-2023. By the end of 2025, capital goods orders, which typically track investment, and capital goods demand survey indicators linked to production expectations, both showed improvement. Amid persistent external risks, domestic orders have led the recent recovery trend.Fitch: Germany’s massive fiscal easing policies are expected to propel it back onto a growth trajectory in 2026.U.S. stocks pared some of their losses, with the S&P 500 down 1% and the Nasdaq down 1.3%.The German DAX index fell by 1.00% on the day.The main Shanghai silver futures contract fell by more than 2.00% during the day, currently trading at 22,680.00 yuan/kg.

Forecast for Gold Price: XAU/USD consolidates above $2,000 as investors await initial US S&P PMI data

Daniel Rogers

Apr 21, 2023 13:52

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During the Asian session, the price of gold (XAU / USD) is oscillating above the psychological resistance of $2,000.00. After a gradual increase, the price of gold has leveled off near $2,005.00 as investors await the release of preliminary S&P PMI data for the United States.

 

S&P500 futures have added some gains during the Asian session following three consecutive declines. As a result of Elon Musk's price-cutting frenzy, Tesla's revenue projections were gloomy, which dampened market sentiment. Near 101.77, the US Dollar Index (DXY) has extended its correction. The USD Index has been consolidating in a range between 100.90 and 102.03 for the past several trading sessions. Therefore, a move that exceeds the previously specified limit will be considered decisive.

 

The subdued USD index weighs on US Treasury yields as well. The demand for U.S. government bonds has increased as weekly unemployment claims have increased. The number of individuals claiming unemployment benefits rose to 245K, exceeding the consensus estimate of 240K. This indicated a softening in the labor market and bolstered expectations that the Federal Reserve (Fed) will not raise interest rates after the monetary policy meeting in May.

 

In the future, the publication of the preliminary US S&P PMI data will determine the impact of the Fed's rate hikes on the scope of economic activity. According to projections, the Manufacturing PMI and Services PMI will decline to 49.0 and 51.5, respectively. A preliminary PMI reading that is weaker than anticipated could impact heavily on the U.S. dollar.

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