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July 9th - A report from Bank of Japan (BOJ) branch governors at Thursdays meeting showed that the Japanese economy remains robust overall despite headwinds including Middle East tensions, rising oil prices, and a weak yen. The BOJ stated that logistical disruptions and raw material shortages caused by geopolitical risks have put pressure on exports and production. The bank added that the risk of a sharp economic downturn has diminished due to the implementation of alternative procurement programs and adjustments to transportation routes. This could strengthen market expectations for further interest rate hikes in the near term. Overnight index swap market pricing currently indicates that the market expects at least one more BOJ rate hike before the end of this year.Yields on UK government bonds of all maturities fell by about 4-6 basis points in early trading.On Thursday, July 9th, the German DAX 30 index opened 247.33 points higher, or 0.99%, at 25113.00; the UK FTSE 100 index opened 30.04 points lower, or 0.29%, at 10459.00; the French CAC 40 index opened 59.35 points higher, or 0.72%, at 8312.01; the Euro Stoxx 50 index opened 56.94 points higher, or 0.92%, at 6261.85; the Spanish IBEX 35 index opened 211.39 points higher, or 1.11%, at 19260.69; and the Italian FTSE MIB index opened 418.25 points higher, or 0.81%, at 52235.50.Gold prices rebounded above $4,100 an ounce on July 9th after Wednesdays sell-off. This rally was supported by a weaker dollar and renewed geopolitical tensions in the Middle East following Wednesdays renewed clashes between the US and Iran. However, rising energy prices could complicate the inflation outlook, reinforcing market expectations that the Federal Reserve will maintain high interest rates for a longer period or raise rates further. The minutes of the Feds mid-June policy meeting highlighted a hawkish shift within the committee, putting pressure on precious metals. Thomas Ryan, an economist at Capital Economics, said, "The minutes reiterated that the door to a September rate hike remains very open."According to Futures News on July 9th, as of 15:00 Beijing time, spot platinum rose 1.86% and spot palladium rose 1.78%.

Gold Price Forecast: XAU/USD views $1,800 as upbeat US labor market fuels hawkish Fed wagers

Alina Haynes

Mar 09, 2023 13:55

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Gold price (XAU / USD) appears vulnerable above $1,810.00 as the upside appears constrained by rising Federal Reserve rate expectations (Fed). The precious metal is anticipated to resume its decline as strong United States Employment data reported by Automatic Data Processing (ADP) has confirmed that January's strong consumer spending and higher payrolls were not a one-time blow to the Consumer Price Index's decline (CPI).

 

S&P500 futures have given up the slight gains they made on Wednesday during the Asian session. As China's CPI and Producer Price Index (PPI) figures indicate deflation, the risk-aversion theme has intensified. The US Dollar Index (DXY) has maintained a sideways trend above 105.20 as investors await the publication of US Nonfarm Payrolls (NFP) data for fresh direction signals. The alpha provided by 10-year US Treasury bonds has risen above 3.98 percent.

 

The official US Employment data is expected to indicate a decline in the payrolls to 203K from the former release of 514k. A figure of 203K is not as terrible as January's 514K figure, but it appears insignificant in comparison. Investors should be aware that a figure of 514K in the last seven months was exceptional.

 

Aside from that, it is anticipated that the unemployment rate will remain at a multi-decade low of 3.4%. The Average Hourly Earnings are expected to ascend to 4.8% on an annual basis. Household income may increase consumer expenditure. Jerome Powell, the chairman of the Federal Reserve, has already confirmed that the Fed will increase interest rates in order to reduce inflation.


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