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July 21 – Capital Economics strategist Thomas Mathews stated in a report that gold remains valuable as a hedge against a stock market crash. Recently, golds performance has arguably been more of a "risk" asset than a "safe" one, given its recent price volatility, which has mirrored that of the benchmark S&P 500. Golds poor performance amidst Middle East conflicts appears to have weakened its supposed inflation-hedging role. However, the link between gold and real bond yields appears to remain intact, and any decline in real yields is expected to boost gold. If the US economy is hit and prompts the Federal Reserve to significantly cut policy rates, the recent positive correlation between gold and the stock market will not be sustained.The ChiNext index rose by more than 1%, with memory chips, semiconductors, and gaming sectors leading the gains.Newly listed stock N Tainuo-U opened 246.82% higher; the prospectus shows that the company is dedicated to blood product replacement therapy.On July 21st, Z.ai announced the completion of a 1GW-level domestically produced AI computing power data center, utilizing entirely domestically produced AI chips. Simultaneously, Z.ai also officially completed its acquisition of XCore Sigma, a domestic AI heterogeneous computing power software company. XCore Sigma originated from the Compiler Laboratory of the Institute of Computing Technology, Chinese Academy of Sciences, and has long been deeply involved in heterogeneous computing power software stacks and compiler optimization, considered one of the top AI infrastructure teams in China. Sources indicate that these two moves respectively fill two key gaps in computing power supply and release capabilities. The former provides the computing resources needed for large-scale model training, while the latter improves the utilization rate of heterogeneous chips, reduces inference costs, and enhances model deployment efficiency through basic software capabilities such as compilers, runtimes, and inference engines.On Tuesday, July 21, the Hang Seng Index opened 7.49 points higher, or 0.03%, at 25,150.54; the Hang Seng Tech Index opened 3.51 points higher, or 0.07%, at 4,755.66; the H-share Index opened 0.71 points lower, or 0.01%, at 8,381.19; and the Red Chip Index opened 4.19 points lower, or 0.1%, at 4,069.11.

Gold Price Prediction: XAU/USD will settle below $1,750 as attention switches to Jackson Hole

Alina Haynes

Aug 22, 2022 14:47

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After reaching a monthly high of $1,807.96, the gold price (XAU/USD) has dropped for five consecutive trading sessions. The price of gold fell below $1,750.00 for the first time since August. As investors drastically reduce their long positions in gold assets in anticipation of hawkish direction from the Federal Reserve, the price is expected to settle below the aforementioned crucial mark (Fed).

 

Observing contradictory comments in the Fed's minutes on policy direction weakened the gold rise earlier. James Bullard, president of the Federal Reserve Bank of St. Louis, proposed an additional 75 basis point (bps) rate hike to achieve price stability sooner. While a few Fed members have issued a statement on lowering the rate of interest rate hikes to protect the economy from future inflation threats, the majority of Fed policymakers have not.

 

As Chinese President Xi Jinping and Russian President Vladimir Putin have confirmed their attendance at the G20 summit in November, geopolitical concerns are also exerting a significant downward pressure on gold prices. This may renew Moscow's assault on humanity in Ukraine.

 

On the front of economic data, investors await the release of the US Durable Goods Orders report, which is anticipated to decrease to 0.6% from the previous release's 2%. When the US economy has previously shown a flat US core Consumer Price Index (CPI), a fall in economic data is not beneficial for the US dollar index (DXY).

 

On an hourly scale, gold prices have fallen to $1,744.70, which is close to the 50% Fibonacci retracement (set from July 21's low of $1,680.91 to August 10's high of $1,807.93). The 20-period and 50-period Exponential Moving Averages (EMAs) at $1,751.90 and $1,757.50, respectively, are falling swiftly, adding to downward filtering. In the meantime, the Relative Strength Index (RSI) (14) oscillates in a negative band of 20.00-40.00, indicating that further declines are likely.


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