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Gold prices fell to a two-week low on Thursday as signs of easing trade tensions boosted risk appetite and reduced golds safe-haven appeal, while a stronger dollar also weighed on gold prices. "The market remains confident that the United States will soon sign a lower tariff agreement with other countries, and this optimism, coupled with a stronger dollar, is weighing on gold prices," said Giovanni Staunovo, an analyst at UBS. Investors are waiting for Fridays non-farm payrolls report to gain further insight into the Feds policy direction. "A weak jobs report should support the Feds calls for further rate cuts this year and push gold prices back to $3,500 an ounce in the coming months," said Giovanni Staunovo.On May 1, institutional analysis pointed out that gold futures plummeted due to easing trade tensions and declining safe-haven demand. The strengthening of the US dollar further dampened enthusiasm for gold as a safe-haven asset and made dollar-denominated commodities more expensive for international buyers. The United States is likely to reach a trade agreement, and market optimism and risk appetite are rising. However, further losses may be limited because expectations of interest rate cuts have also been raised after the United States released a series of weak economic data. The US economy contracted by 0.3% in the first quarter. Lower interest rates usually stimulate demand for non-interest-bearing gold.Ukraines Foreign Minister: The EUs top diplomat has been informed of the mineral agreement reached with the United States.According to the Wall Street Journal: Citigroup hired Trumps former trade chief Robert Lighthizer.According to the Wall Street Journal: The U.S. government has commissioned L3Harris to completely transform a Boeing 747 once used by the Qatari government.

GBP/USD maintains a defensive posture above 1.2400, with focus on US inflation, BoE Governor Bailey, and Fed minutes

Alina Haynes

Apr 12, 2023 13:47

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GBP/USD fluctuates between 1.2415 and 1.2420 in the early hours of Wednesday's crucial session as bulls struggle to maintain control. This reflects a cautious outlook advance of the US Consumer Price Index (CPI) for March and the minutes from the most recent Federal Open Market Committee (FOMC) Monetary Policy Meeting. The speech of Bank of England (BoE) Governor Andrew Bailey is also crucial to monitor.

 

The most recent Bloomberg headlines indicate, however, that the British labor market is no longer constrained. "For the first time in two years, the number of people available for work in the United Kingdom increased, easing one of the tightest labor markets in more than a decade," reported the news.

 

In a similar vein, Reuters reported optimistic UK housing prices, allowing GBP/USD buyers to remain optimistic prior to high-profile data events. Reuters reported on Wednesday that British housing sales recovered to within a whisker of pre-crisis levels in March, signifying a rebound from September, when the failed economic plan of former prime minister Liz Truss caused market turmoil.

 

Recently, Neel Kashkari, president and CEO of the Federal Reserve Bank of Minneapolis, stated, "The inflation target of 2% should not be changed." However, other Fed policymakers have recently signaled divergent concerns, which has depressed the Cable investors. President of the Federal Reserve Bank of Philadelphia, Patrick Harker, stated that the Federal Reserve will continue to scrutinize available data to determine if additional action is required. John Williams, president of the New York Fed, had previously stated that interest rates will need to be lowered if inflation declines. In addition, the president of the Chicago Fed, Austan Goolsbee, stated on Tuesday that they should be cautious about increasing interest rates in light of recent developments in the banking sector.

 

In its January report, the IMF lowered its forecast for global real Gross Domestic Product (GDP) growth for 2023 from 2.9% to 2.8%. However, the international lender defends the efforts of the main central banks to combat inflation and gives GBP/USD pair traders no substantial indications.

 

After Wall Street's muddled close, S&P 500 Futures remain directionless in this environment, while US Treasury bond yields rise and encourage US Dollar sellers.

 

To thwart GBP/USD investors, the FOMC Minutes must defend the rate hike path. The meeting between US President Joe Biden and British Prime Minister Rishi Sunak in Northern Ireland is also notable. (NI).


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