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June 10th - Seema Shah, Chief Global Strategist at Principal Asset Management, stated that while US inflation remains uncomfortably high at 4%, weaker-than-expected core data did alleviate some pressure. With rising energy prices being the primary driver and housing costs easing, we havent yet seen clear signs of a broader second-round effect. This should allow the Federal Reserve to remain patient. Although the market seems to have overpriced further rate hikes this year, that risk remains, and todays data did not eliminate it.June 10 – As expected, the Bank of Canada kept its benchmark interest rate unchanged at 2.25% today. In its statement, the Bank of Canada noted that economic activity remained weak after a surprise 0.1% annualized decline in GDP in the first quarter (the third contraction in the past four quarters). The Bank of Canada avoided using the term "recession." The bank expects GDP to return to growth in the second quarter, "but even with some rebound, the economy is expected to remain in a state of overcapacity." Economists said that overcapacity (or economic slack) should help curb inflationary pressures.June 10 – The Bank of Canada kept its main interest rate unchanged on Wednesday, in line with market expectations, and stated that there is currently no sufficient evidence that rising energy prices are driving broad-based inflation. Bank of Canada Governor Macklem reiterated that the bank would not hesitate to raise interest rates to control inflation if necessary. Wednesdays decision marks the fifth consecutive time the Bank of Canada has kept its main policy rate at 2.25%, as several factors have complicated the economic outlook. The war in Iran has caused gasoline prices to soar, putting pressure on household budgets, although Canada, as a net exporter of crude oil, has benefited from increased revenue. The central bank stated, "To date, there is no sufficient evidence that high energy prices have been widely passed on to other consumer prices. The Governing Council will continue to ignore the short-term effects of the war on overall inflation, but will not allow rising energy prices to develop into persistent inflation."US Senate Majority Leader Thune: Trumps nomination for Director of Intelligence will be a major decision.US Senate Republican Leader Thune: Most Republican senators want to complete the mission in Iran.

After Its Worst Week in Seven Months, Gold Rises Before Powell's Address

Skylar Williams

Feb 06, 2023 10:49

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Gold prices were subdued on Monday following their worst week in seven months, with attention now shifting to a talk with Federal Reserve Chair Jerome Powell after stronger-than-anticipated U.S. job statistics stoked fears of additional monetary tightening.


The price of gold fell by 2.5% on Friday and more than 3% in the previous week after U.S. employment data for January was significantly stronger than anticipated. The readings sparked concerns that the Fed has sufficient economic room to continue raising interest rates, resulting in a dollar and Treasury yields recovery rally.


This dragged on most metal prices, with gold- which had a good run-up to Friday’s data- suffering substantial losses. For the first time in nearly a month, the price of gold went below the important $1,900 support level.


Spot gold was steady at $1,864.93 an ounce, while gold futures expiring in April slid 0.2% to $1,876.40 an ounce by 18:50 ET (23:50 GMT) (23:50 GMT).


Tuesday's discussion with Chairman Jerome Powell at the Economic Club of Washington, D.C. will provide additional economic guidance. Any remarks on the current employment numbers and inflation trajectory will be attentively monitored.


As anticipated, the Fed hiked interest rates last week and hinted that it will continue to do so in the near future. This sparked greater bets that the central bank could swing away from its hawkish posture by the year-end.


However, these wagers were quickly reversed by Friday's strong employment figures, which also fueled fears that U.S. inflation may remain rising for a longer period of time than anticipated.


Additionally, other precious metals declined on Friday and were trading in a range on Monday. After plunging below $1000 per ounce, platinum futures climbed 0.2%, while silver futures resumed losses, sliding 0.4% to $22.340 per ounce.


Copper prices recovered marginally this week after falling nearly 4% the previous week, as markets balanced a potential demand resurgence in China against rising fears of a worldwide recession. Rising interest rates and soaring inflation are projected to severely weigh on the global economy this year.


High-grade copper futures increased 0.4% to $4.0475 a pound.


This week, the focus is on additional economic indicators from the world's largest copper importer, China, as well as social upheaval in the world's second-largest copper exporter, Peru.

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