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UBS: Raises gold price target from $3,000/oz to $3,200/oz amid rising risks.On March 17, Indian Prime Minister Narendra Modi said that US President Trump is "better prepared" for his second term and has provided a clear roadmap. In a few weeks, Washington plans to impose reciprocal tariffs. India will be one of the trading partners facing tariffs starting in April, which may cause difficulties for Indian exporters in industries ranging from automobiles to agriculture. After Modi and Trump met last month, the two countries agreed to resolve the tariff dispute by the fall of 2025. "This time, he seems to be more prepared than before," Modi said. "He has a clear roadmap in his mind with clear steps, each designed to lead him to his goals." Modi also praised Trumps "kindness and humility", emphasizing the close ties between the leaders of the two countries. "His (Trumps) expression reflects his America First spirit, just as I believe in country first. I represent India first, and thats why we are so well connected," Modi said.Japans 40-year government bond yield rose to 3%, the highest level since it was issued in 2007.Japans 30-year government bond yield rose to 2.63%, the highest level since April 2006.On March 17, Morgan Stanley published a report, indicating that according to the full-year performance of 2024, the earnings forecast of Haifeng International (01308.HK) was adjusted, and the earnings per share forecast for 2025 was raised by 2%, the earnings per share forecast for 2026 was raised by 6%, and the earnings per share forecast for 2027 was introduced to 19 US cents. The bank believes that further earnings revisions in the downward cycle of container shipping from 2025 to 2026 will put pressure on Haifeng Internationals valuation. Therefore, the bull market-benchmark-bear market target price-earnings ratios were adjusted from 14 times, 11 times and 7 times to 12 times, 9.5 times and 6.0 times, respectively. The baseline scenario valuation multiples are basically in line with the historical average since 2011, taking into account the potential special dividends from 2025 to 2026, while the bull market scenario valuation falls within a standard deviation range. Based on this, the bank lowered the weighted target price of Haifeng International from the previous HK$21.3 to HK$18.8, and the rating was "in line with the market".

A Hawkish Federal Reserve Predicts A Recession, Boosting Gold Prices

Skylar Williams

Jan 09, 2023 10:27

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Gold prices continued to rise on Monday, holding a seven-month high, as evidence of a worsening job market raised expectations for a lower U.S. inflation estimate this week and a possible shift in the Federal Reserve's hawkish tone.


According to numbers provided by the U.S. Department of Labor on Friday, nonfarm payrolls in the United States grew at their slowest rate in a year in December. The results for the preceding two months were revised downwards, and wage growth also slowed.


The report soothed concerns that an overheated U.S. labor market will prevent inflation from falling further this year and increased the likelihood that the Federal Reserve will relax its hawkish stance sooner than expected, lessening pressure on gold and other non-yielding assets.


As of 19:35 E.T., spot gold rose 0.1% to $1,868.61 per ounce, while gold futures rose 0.2% to $1,871.15 per ounce (00:35 GMT). Following an almost two percent increase on Friday, the value of both assets reached its highest point since early June.


After reversing the entirety of last week's payrolls-related gains, the dollar and 10-year Treasury yields declined further on Monday.


The focus now switches to Thursday's U.S. consumer price index inflation data for fresh hints on the future direction of U.S. interest rates. Inflation, as measured by the CPI, is expected to have reached a one-year low in December, demonstrating that the Fed's series of sudden interest rate hikes in 2022 had had the desired impact.


Last year, these rate hikes crushed gold prices by increasing the opportunity cost of holding non-yielding assets. However, the yellow metal has experienced a resurgence in popularity over the past month, as safe-haven demand has returned due to fears of a possible recession in 2023.


The majority of traders predict that the Fed will not raise interest rates in February by more than 25 basis points. However, the central bank has cautioned that it may keep interest rates elevated for a longer period of time.


Copper prices slipped slightly on Monday, but remained near a seven-month high after the reopening of China's foreign borders prompted a large increase in the price of the red metal.


Following a 2.6% advance last week, copper futures dipped 0.4% to $3.9588 per pound.


As a result of China's additional easing of anti-COVID rules this month, markets anticipate a rapid economic recovery in the largest copper importer in the world.