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The "Stay On" Camp: 1. Moodys: Expects the Fed to hold rates steady, with a rate cut unlikely in the short term. Holding rates steady this year is the baseline scenario. If inflation expectations continue to rise, a rate hike may be the next step. 2. Nomura: Expects the Fed to hold rates steady, with a reduced likelihood of a rate cut in the short term. Rates are likely to remain unchanged in 2026. 3. JPMorgan Chase: Expects the Fed to hold rates steady and for the remainder of the year to remain unchanged. The policy stance is likely to shift clearly from accommodative to neutral. 4. Wells Fargo: Expects the Fed to hold rates steady. A rate hike would require evidence of a significantly overheated labor market or a further deterioration in the inflation outlook. It is difficult to find justification for any action at this stage or in the foreseeable future. 5. BNY Mellon: Expects the Fed to hold rates steady. The statement is expected to suggest two-way risks to interest rates. The Fed is expected to remove its 2026 rate cut expectations, and there will be no rate cuts or hikes this year. Rate Cut Camp: 1. Goldman Sachs: Expects the Fed to hold rates steady and likely removes its previous forward guidance hinting at rate cuts; short-term rate hikes are unlikely, with rate cuts expected in June and December 2027. 2. UBS: Expects the Fed to hold rates steady and likely to formally abandon its dovish stance; still believes the Feds next move will be rate cuts, with 25 basis point cuts expected in March and June 2027. 3. Citigroup: Expects the Fed to hold rates steady, but with easing tensions in the Middle East driving down oil prices and a weakening labor market, expects the Fed to cut rates by 25 basis points in September, October, and December. 4. Commerzbank: Expects the Fed to hold rates steady and likely abandons its dovish language. Rate cuts are expected to begin around mid-next year, accumulating to 75 basis point cuts by the end of 2027. Rate Hike Camp: 1. Capital Economics: Expects the Fed to hold rates steady, with a high probability of two "insurance rate hikes" in December and early next year. 2. BNP Paribas: Expects the Fed to raise rates little before the November midterm elections, with the first rate hike likely in December at the earliest, and at a more moderate pace than in 2022. 3. Deutsche Bank: Expects the Fed to hold rates steady, maintaining its baseline assessment of keeping rates unchanged for the long term, but the risk of future rate hikes is rising. 4. PGIM: Expects the Fed to hold rates steady, with three rate hikes this year to curb overheating, three rate cuts in 2027, and one more in 2028, ultimately reaching a rate of 3.375%. Others: 1. Barclays: Expects the Fed to hold rates steady, with forward guidance wording likely to be removed from the statement to reduce implications for future rate cuts. 2. Bank of America: Expects the Fed to hold rates steady, with the statement likely to remove any mention of an accommodative bias and potentially adjust its description of job growth. 3. ANZ: Expects the Fed to hold rates steady, with the statement likely to remove any accommodative wording and reaffirm its commitment to achieving its 2% inflation target. 4. Mitsubishi UFJ: Expects the Fed to hold rates steady. The upcoming FOMC meeting is crucial, not because of policy changes, but because of forward guidance. 5. Investment management firm MFS: Expects the Fed to hold rates steady, potentially indicating a neutral monetary policy stance. Warsh may also make some changes, such as ceasing the use of the dot plot and reducing press conferences.Indonesias Ministry of Trade: From the demand side, global gold purchasing activity has slowed down due to continued volatility in international financial markets.The China Earthquake Networks Center officially reported that a magnitude 3.6 earthquake occurred at 13:11 on June 17 in Haixi Prefecture, Qinghai Province (37.86 degrees north latitude, 95.54 degrees east longitude), with a focal depth of 10 kilometers.According to a Reuters poll, 22 out of 35 economists expect the Indonesian central bank to raise its 7-day reverse repo rate by 25 basis points to 5.75% or higher on June 18.According to a Reuters survey, the Indonesian central banks 7-day reverse repo rate is expected to be 5.75% by the end of 2026 (previously expected to be 5.50%).

Gold Price Prediction - Gold Prices Will Experience Declining Pressure as the Dollar Strengthens

Daniel Rogers

May 13, 2022 10:17

Gold prices are under pressure to decline as investors flock to the dollar as a safe-haven asset. The market became more risk-averse as a result of rising inflation statistics. The dollar rises as investors flock to the currency for its safe-haven attraction.

 

In response to strong inflation data, investors shifted into bonds and sold equities, lowering benchmark yields. Today, the yield on ten-year bonds fell 7 basis points.

 

This week, initial unemployment claims increased by 1,000 to 203,000 from the revised total of 202,000 previous week. The result conforms to the tight labor market. As workers are pushed to seek out better options, job postings and resignation rates have reached all-time highs.

 

The most recent CPI data indicates that the Fed is concerned about rising inflation. The CPI came in at 8.3%, which was stronger than anticipated. Nonetheless, the reading was lower than March's reading of 8.5%. The data supports the Fed's strategy to aggressively tighten interest rates in response to rising inflationary pressures.

Technical Evaluation

Gold prices fall below the 200-day moving average of $1,836 and are subject to bearish pressure that might drive gold prices to $1,800. Near the 200-day moving average at 1,836 is viewed as support. Near the 10-day moving average of 1,874, there is expected to be resistance.

 

As a result of the Fast Stochastic's crossover sell signal, short-term momentum is negative. As the fast stochastic displays a value of 9.79 below the oversold threshold of 20, prices are oversold.

 

As the MACD produces a crossover sell signal, medium-term momentum has gone negative. This occurs when the 12-day moving average minus the 26-day moving average crosses below the MACD line's 9-day moving average.

 

The trajectory of the MACD (moving average convergence divergence) histogram is negative, indicating falling prices.

 

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