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December 8th - The Reserve Bank of Australia (RBA) will announce its final interest rate decision of the year on Tuesday, with the market expecting no rate adjustment. Nevertheless, this will remain one of the most closely watched meetings of the year. A wealth of data from the RBA indicates strong demand, rising inflation risks, and the economy nearing its capacity limits, making a hawkish signal highly likely. Economists from some major banks have already begun calculating that the RBA may tighten monetary policy in February next year after receiving fourth-quarter inflation data.On December 8th, the Election Committee of the 8th Legislative Council of the Hong Kong Special Administrative Region (HKSAR) announced the results of the functional constituency elections. Thirty seats were elected from 28 functional constituencies, and 30 members were elected as new Legislative Council members from these constituencies. The new Legislative Council will consist of 90 members, including 40 elected by the Election Committee, 30 elected from functional constituencies, and 20 elected by geographical constituencies. Earlier on the 8th, the list of the 40 newly elected Legislative Council members from the Election Committee had already been published. The list of the 20 members elected by geographical constituencies is expected to be announced on the same day. The term of the 8th Legislative Council of the HKSAR will begin on January 1, 2026, and will be four years.December 8th - Market speculation persists that the Bank of Japan (BOJ) may raise interest rates this month, but participants remain betting on a continued weakening of the yen. Traders at Bank of America, Nomura Holdings, and RBC Capital Markets say investor positioning reflects this bet. Citigroups "pain index" for the yen remains deep in negative territory, indicating continued negative sentiment towards the yen. Even with BOJ Governor Kazuo Ueda hinting at a possible imminent rate hike and the BOJ reportedly preparing to raise rates in December unless there is a major shock to the economy or financial markets, investors remain bearish on the yen. This is because even if the BOJ takes action, Japanese yields are still expected to be significantly lower than those in the US, which is more favorable for the dollar. Ivan Stamenovich, head of G-10 currency trading for Asia Pacific at Bank of America, said, "Positioning remains geared towards betting on the dollar to continue rising against the yen until the end of the year, and this trend is unlikely to change unless the BOJ delivers a real surprise." He added that Uedas hawkish comments sparked discussion about the currency pair, but market sentiment has not fundamentally changed.On December 8th, Israel Defense Forces Chief of Staff Zamir stated on the 7th that the withdrawal line drawn by the Israeli military under the first phase of the Gaza ceasefire agreement, known as the "Yellow Line," is the "new border" of the Gaza Strip. During an inspection of the Gaza Strip that day, Zamir said that the "Yellow Line" is the "new border" of the Gaza Strip, serving as both Israels forward defensive line and the boundary for Israeli military operations. Israel maintains operational control over large areas of the Gaza Strip and will continue to hold these lines. According to the first phase of the Gaza ceasefire agreement, the area outside the "Yellow Line" remains under Israeli control, and Israeli troops will no longer be stationed or conducting operations within the "Yellow Line."Anson Resources of Australia and Nusano of the United States have signed a lithium supply agreement.

The XAU/USD Gold Price Outlook bears creep in, yet calls from new heights can't be ignored

Daniel Rogers

Jul 25, 2022 14:47

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Although statistics released on Friday revealed that US economic activity contracted for the first time in almost two years in July due to a slowdown in services outweighing expansion in manufacturing, gold is selling at a discount to the dollar at the start of the week. The XAU/USD exchange rate is $1,722.30 with a day's trading range of $1,719.98 to $1,727.66.

The US Composite PMI Output Index dropped sharply to 47.5 this month from a final reading of 52.3 in June, suggesting the US may be entering a recession. This drop occurred on Friday. However, safe-haven flows helped the greenback on Friday night as investors fled equities in response to disappointing corporate announcements and boosted the dollar.

However, according to the earlier analysis, Gold price might be on the approach of a huge correction, the Fed meeting will be important, and the gold price has reduced a major price imbalance on the weekly chart in advance of a crucial event in this week's Federal Open Market Committee meeting.

After the hefty 75bp rate rise in June, the Federal Reserve is widely predicted to implement another increase in July, bringing the target range for the Fed Funds rate to 2.25% - 2.50 %. By doing so, the Committee's policy position would be aligned with its anticipated longer-term neutral level. In addition, Top1 Markets analysts expect Chair Powell to maintain flexibility by keeping the door open to subsequent rate hikes of 75 basis points.

Our analysts say that even if the gold price were to rise, the average position held by prop traders would still be about twice as large as normal, implying that a great deal of pain would resonate across gold markets if prices were to fall down. As there has been no sign of a gold market breakdown yet, it is likely that the recent gain will fizzle out when confronted with a sea of bids.

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