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On June 2nd, Federal Reserve official Hamak stated that maintaining current interest rates is reasonable given the considerable uncertainty surrounding the economic outlook, but officials may need to act quickly to address rising inflation. Hamak said she is more concerned about inflation, as it has exceeded the Feds 2% target for five years; she is less worried about the continued strength of the labor market. Hamak stated that the Feds benchmark interest rate "may not be restrictive," and she has not heard business owners complain that high interest rates are hindering their investment. Price pressures are "widespread," encompassing both goods and non-housing services.June 2 – IBM (IBM.N) plans to invest over $10 billion in quantum computing over the next five years. This funding will be used for research and development, manufacturing, capital expenditures, ecosystem partnerships, and mergers and acquisitions to support its roadmap toward “IBM Quantum Starling.” IBM has a clear roadmap to deliver IBM Quantum Starling—the world’s first large-scale, fault-tolerant quantum computer—by 2029, capable of performing 20,000 times more computations than existing systems.Federal Reserves Hammarck: The severe energy shock poses a major challenge to monetary policy.Federal Reserves Hamack: The unemployment rate is close to full employment.Federal Reserves Hamack: There are risks in waiting until high inflation begins to take root in the economy and there are clear signs before taking action.

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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