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U.S. Secretary of State Marco Rubio: The United States supports the courageous Iranian people.On January 10th, a research report from Founder Securities stated that the December non-farm payroll data was mixed, with the US job market generally showing a mild downward trend, but the unemployment rate showed marginal improvement, giving the Federal Reserve more reason to wait and see in January. Combined with the Supreme Courts potential declaration that the IEEPA tariffs are unconstitutional, this may be a short-term positive for US stocks and the US dollar, but a negative for US Treasuries. Data on new jobs, job openings, and hourly wage growth indicate that the US job market remained relatively weak in December, but the marginal decline in the unemployment rate was one of the few bright spots. Looking at interest rate futures and US Treasuries, the market priced in a no-rate-cut by the Fed in January, with a possible rate cut as early as June. Meanwhile, the Supreme Courts potential declaration that the IEEPA tariffs are unconstitutional means that economic expectations may improve marginally, inflationary pressures may weaken, but the fiscal deficit may worsen. With the Fed in no hurry to cut rates and tariffs easing, US Treasuries face many unfavorable factors in the short term and are likely to remain at high levels. US stocks will benefit from the AI boom and reduced tariff disruptions, especially in sectors affected by tariffs such as consumer staples and industry, which are more resilient.January 10 - According to the UN Security Council schedule, the Security Council will hold an emergency meeting on the situation in Ukraine on January 12.On January 10th, Xiaomi Auto released a statement in response to netizens questions, stating that the new generation SU7 will be equipped with the Xiaomi Super Motor V6s Plus across the entire series. In addition to the motor being jointly supplied by United Electric and Inovance Technology, Xiaomi will also introduce its own self-developed and self-produced V6s Plus Super Motor in the future to further improve production efficiency and shorten delivery cycles.On January 10th, Chen Jianye, Secretary of the Party Leadership Group and Director of the Fujian Provincial Department of Industry and Information Technology, stated that the next step will be to accelerate the digital transformation of the manufacturing industry, enhance its green foundation, and promote the transformation of industries towards "new" and "green." This includes: Deepening the implementation of the "Nine Major Actions" for comprehensive digital empowerment of industrial manufacturing; adhering to the principle of enterprise-led development, strengthening government guidance, and leveraging the role of service providers to create more transformation benchmarks, promote chain-based transformation and overall transformation, and accelerate the large-scale application of digital technologies in the manufacturing industry; Deepening and expanding "Artificial Intelligence +"; making good use of the new round of incremental policies for artificial intelligence, supporting the cultivation of industry-specific models and intelligent agents, accelerating industry adaptation and scenario expansion, and promoting the empowerment of various industries by artificial intelligence; guiding the differentiated and characteristic development of the Fuzhou-Xiamen-Quanzhou provincial-level artificial intelligence industrial parks; and carrying out in-depth energy conservation and carbon reduction special actions; closely monitoring national carbon assessment requirements, and implementing energy conservation reviews and carbon emission assessments for "high energy consumption and high pollution" projects in the industrial sector; building Fujians green advantages in manufacturing, cultivating more national and provincial-level green parks and enterprises, and promoting the construction of a number of zero-carbon parks and factories.

Investors Concentrate on China and Fed Statements, Putting Pressure on Gold

Alina Haynes

Nov 29, 2022 15:01

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Gold futures basis for the December 2022 Comex contract is $1740 as of 4:48 PM EST, after adjusting for today's fall of $14, or -0.80%. In a few of days, the most active or front month for gold futures will switch from December to February 2023. Currently, the Comex gold contract for February 2023 is down $14.10 and set at $1754.70.

 

The December silver futures contract is also trading lower today. Futures for December are currently down -2.59%, or $0.56, and set at $20.87. The most active front-month contract for silver futures is likewise shifting from December to the March 2023 contract, which is currently down 54.9 cents, or -2.59%, and is fixed at $21.065.

 

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Why have the prices of gold and silver dropped today?

Today's weakness in both gold and silver is the result of a combination of factors. Concerns over large protests in China are prominent. According to the New York Times, after a weekend of clashes between officials and protesters, video footage from two sites in Shanghai and Beijing revealed a substantial security presence.

 

Citizens of China have demonstrated against China's harsh Covid restrictions and lockdowns, resulting in countrywide demonstrations. Investors are concerned that lockdowns and stringent restrictions will stifle economic growth in China, the second-largest economy in the world.

 

Several members of the Federal Reserve have been quite vocal about expected interest rate increases. James Bullard, president of the St. Louis Fed, is one of the Federal Reserve's more hawkish members. Last week, he stated that the Federal Reserve's benchmark rate should go to as much as 7 percent in order to combat inflation.

 

When asked this week by Greg Robb, an editor at MarketWatch, how long he expects the fed funds rate to remain in the 5% to 7% range, he stated that "the Federal Reserve will likely need to keep its benchmark policy rate above 5% for the majority of 2023 and into 2024 in order to successfully combat inflation."

 

During his interview with MarketWatch, he also stated, "It appears that markets are still underestimating the extent to which the Fed will need to maintain a restrictive monetary policy in order to rein in inflation, explaining that there is still some hope that inflation will decline on its own."

 

When Chairman Powell talks on Wednesday at an event organized by the Brookings Institution in Washington, investors are wondering if he would tone down his aggressive stance. Current consensus holds that the Federal Reserve will increase its benchmark rate by 50 basis points in December.

 

However, the likelihood of a 50-basis point rate increase has decreased. There is a 67.5% chance, according to the CME's FedWatch program, that the Fed will raise its benchmark rate by 50 basis points at the final FOMC meeting of the year. A day ago, the CME's FedWatch program predicted a probability of 75.8%, and a week ago, it predicted a probability of 80.6%.


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