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According to the Iranian Students News Agency, the Iranian rial has fallen to a record low of 1.8 million against the US dollar.1. JPMorgan Chase: Expects the Fed to hold rates steady, with the vote to maintain the current rate expected to be 11-1, and Milan likely to vote against it. 2. Societe Generale: Expects the Fed to hold rates steady. Given that this meeting will not release a summary of economic projections or a dot plot, the market anticipates few policy changes. 3. Goldman Sachs: Expects the Fed to hold rates steady. The post-meeting statement may acknowledge improved employment data and rising inflation, but will maintain existing policy guidance. 4. MUFG: Expects the Fed to hold rates steady. Fed Governor Milan may abstain from voting on a rate cut, and the statement may explicitly mention increased upside risks to the inflation mandate. 5. Wells Fargo: Expects the Fed to hold rates steady. The statement may indicate that energy costs are keeping inflation high and weaken forward guidance, revising the wording regarding the magnitude and timing of further adjustments to the benchmark interest rate. 6. Morgan Stanley: Expects the Fed to hold rates steady. The statement is expected to change little, with the FOMC likely maintaining an accommodative bias, but emphasizing that high uncertainty means patience is needed in policymaking. 7. Deutsche Bank: Expects the Fed to hold rates steady, possibly removing the word "further" from the wording regarding "the magnitude and timing of further adjustments to the benchmark interest rate" to pave the way for future rate hikes. 8. Danske Bank: Expects the Fed to hold rates steady and may not provide clear forward guidance, but any cautious hints at restarting easing could trigger a decline in Treasury yields and a broad weakening of the dollar. 9. BNY Mellon: Expects the Fed to hold rates steady with very limited forward guidance, as the market has not yet priced in persistent inflation risks, giving the Fed room to temporarily ignore short-term inflationary pressures.On April 29th, the Kremlin stated on Wednesday that despite the UAEs announcement of its withdrawal, Russia still plans to remain in OPEC+ and hopes the group will continue to operate. The UAE announced its withdrawal from OPEC and OPEC+ on Tuesday, amidst energy crises triggered by the Iran-Iraq war exposing internal divisions among Gulf states. Kremlin spokesman Dmitry Peskov stated that OPEC+ is an important organization that helps reduce energy market volatility and stabilize the market. Russia respects the UAEs decision and hopes energy dialogue will continue. Russia joined OPEC+ in 2016, and the group accounted for nearly 50% of global oil production last year. The UAE is the fourth largest oil producer in OPEC+, while Russia is the second largest after Saudi Arabia.On April 29th, the European Union announced temporary measures to mitigate some of the impacts on businesses caused by the sharp rise in energy prices due to the Middle East conflict. The EU executive body stated that member states can provide up to 70% compensation to companies in the agriculture, fisheries, or transport sectors for additional costs incurred due to rising fuel or fertilizer prices caused by the crisis. The European Commission added that energy-intensive companies eligible for temporary price relief can also receive assistance of up to 70% of their electricity bills. This framework, known as the "Interim State Assistance Framework for the Middle East Crisis," will be in effect until December 31, 2026. The European Commission stated: "While the transition to a cleaner economy remains a long-term solution to protect EU companies from global energy shocks, the Interim State Assistance Framework for the Middle East Crisis allows member states to take immediate action to ensure that the growth of the most affected companies does not suffer irreparable damage due to the current crisis."The OPEC Fund launched a $1.5 billion aid package to help countries cope with growing economic pressures caused by disruptions in energy, commodities, and trade.

Forecast for the price of gold: XAU/USD tussles with $1,730 resistance before US inflation

Daniel Rogers

Sep 13, 2022 10:57

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As traders anticipate the crucial US Consumer Price Index (CPI) on Tuesday, the price of gold (XAU/USD) grinds higher above a fortnight peak after a two-day advance to $1,725 per ounce. The market's optimism and anticipated preparations for today's inflation data may be responsible for the metal's most recent increases.

 

The market's cautious optimism appears to have been supported by rumors that Ukraine is succeeding in driving the Russian troops away from some of its conflict zones, even though this also increased concerns about Russia's strong response. The expectation of additional stimulus from powerful economies like China, the US, the UK, and Europe might be on the same lines. It's important to keep in mind that a Chinese holiday and a light schedule may have contributed to the XAU/recovery USD's because Beijing's lack of political or economic problems may have supported metal prices. In addition, recent news from the Wall Street Journal (WSJ) that US gas prices have fallen for a 13th week in a row helped to relieve market pressure and encouraged a risk-taking attitude that was favorable to the gold price.

 

However, the recent easing of the headline economics and the inflation expectations seems to have pushed back the gold bears despite a light schedule, even though the policymakers from the US Federal Reserve and the European Central Bank (ECB) remain hawkish elsewhere.

 

In the midst of these maneuvers, Wall Street posted another day of profits despite rising US Treasury yields, which at the time were up five basis points (bps) to 3.36%. The US Dollar Index (DXY), which fell for a second straight day to the lowest levels in a fortnight, eventually dipped to approximately 108.30, was affected by the same factors.

 

Moving on, the US CPI for August is critical in light of the most recent easing of pricing pressure. According to the projections, the headline figure will decline to -0.1% MoM from 0.0% the previous month, while the CPI excluding food and energy is expected to hold steady at 0.3% MoM. The US dollar may continue to decline if the inflation numbers are weaker, which might support the XAU/continued USD's gain.

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