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1. All three major U.S. stock indexes closed lower. The Dow Jones Industrial Average fell 1.63% to 46,225.15 points, a new low for the year; the S&P 500 fell 1.36% to 6,624.7 points; and the Nasdaq Composite fell 1.46% to 22,152.42 points. McDonalds and Procter & Gamble led the decline, falling more than 3%. The Wind U.S. Tech Big Seven Index fell 1.47%, with Amazon falling more than 2%. The Nasdaq China Golden Dragon Index fell 2.06%, Weibo fell more than 10%, and Tencent Music fell more than 9%. 2. All three major European stock indexes closed lower. The German DAX fell 0.96% to 23,502.25 points; the French CAC40 fell 0.06% to 7,969.88 points; and the UK FTSE 100 fell 0.94% to 10,305.29 points. 3. The WTI crude oil futures contract closed up 3.68% at $99.05 per barrel; the Brent crude oil futures contract rose 5.7% to $105.06 per barrel. 4. International precious metals futures generally closed lower. COMEX gold futures fell 3.68% to $4823.90 per ounce, and COMEX silver futures fell 5.63% to $75.42 per ounce. 5. Most London base metals fell. LME aluminum rose 0.59% to $3419.5 per tonne, LME nickel fell 0.20% to $17160.0 per tonne, LME lead fell 0.86% to $1913.0 per tonne, LME zinc fell 2.94% to $3132.5 per tonne, LME tin fell 2.95% to $45345.0 per tonne, and LME copper fell 3.40% to $12340.5 per tonne.On March 19, just one day after resigning, former U.S. Counterterrorism Center Director Joe Kent stated in an interview on Wednesday that there was no intelligence indicating Iran would launch a "massive surprise attack" similar to 9/11 or Pearl Harbor. Kent said, "To reiterate what we know about Iran—they have always been very, very cautious when escalating confrontation." Kent also stated that he believes Israel feels emboldened to wage war and is confident the U.S. will have to respond. "Israel believes that whatever action they take, whatever the situation, they can proceed with this action, and we can only respond. This reflects both the relationship between the two sides and the existence of lobbying forces pushing us toward war." Kent announced on Tuesday that he had submitted his resignation due to disagreements with the administration regarding war with Iran. The White House has repeatedly cited Iran as an "imminent nuclear threat" as a reason for launching an attack on Iran.A Reuters survey of Japanese companies found that over 80% expect net profits to grow or remain stable in fiscal year 2026/27. Opinions among Japanese companies are divided regarding Sanae Takaichis proposal to suspend the food consumption tax. Japanese companies anticipate that oil supply disruptions and rising energy costs will be major concerns.Bahrain has denied reports from Irans Fars News Agency that its liquefied natural gas (LNG) refinery was targeted in an attack. Bahrain states that it has no LNG refineries in the country.Iranian Islamic Revolutionary Guard Corps: A Barbados-flagged oil tanker has been evacuated from the Strait of Hormuz after Iranian forces went on high alert.

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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