EUR/USD 1.14596
-0.032%
Gold 4295.56
0.742%
Oil 97.394
-0.088%
USD/JPY 156.073
-0.130%
GBP/USD 1.33725
-0.055%
GBP/JPY 208.719
-0.180%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
Japanese Finance Minister Satsuki Katayama: We will review budget requests and control debt issuance at a level that can gain market confidence.On September 17th, it was reported that on September 16th, Fujian and Ningxia conducted their first cross-provincial collaborative computing and power management operation. On the same day, some computing power tasks from pilot server racks in Fuzhou and Xiamen were transferred across provinces to the Zhongwei Data Center in Ningxia through unified scheduling. The power departments of both regions simultaneously utilized a new power load management system to coordinate and dynamically monitor the computing load.On September 17th, Katherine Brooks, Head of Institutional Research, stated on Wednesday that the latest CPI data supports the Bank of Englands "hawkish pause." However, the real inflation shock may occur in September. Brooks noted that there are currently no signs that inflation is spreading to the broader economy. However, the inflation report showed that raw material costs rose 6.1% year-on-year, and producer prices rose 3.7%. These costs will either ultimately be passed on to already burdened consumers or squeeze corporate profit margins, both of which are detrimental to the UK economy. Brooks pointed out that stable core inflation is a positive sign, but the Bank of England has stated that energy prices now have a greater impact on inflation expectations than core inflation. Furthermore, persistently high energy price ceilings also pose an upside risk to future inflation. Brooks believes that although the market has lowered its expectations for near-term interest rate hikes by the Bank of England, future rate hikes cannot be ruled out; the market is currently pricing in approximately four rate hikes by the end of next year. Unless the war with Iran ends and supply constraints in the Middle East ease, the UK economy will continue to face long-term pressure for interest rate hikes.Japanese Chief Cabinet Secretary Minoru Kihara: We will continue to monitor the impact of the (interest rate hike) on the US economy and markets.Japanese Chief Cabinet Secretary Minoru Kihara: Japans stance on exchange rates has remained unchanged since the joint intervention by the United States and Japan.

After the dollar approached a new 20-year high, gold prices fall

Skylar Williams

Jul 12, 2022 11:20



With a second positive U.S. inflation data in two days, the dollar rocketed to a fresh 20-year high on Monday, displacing gold off its $1,700 per ounce perch.


Gold futures for August delivery on the New York Comex closed down $10.60, or 0.6%, at $1,731.70 per ounce, extending last week's fall of 3.3% — the fourth straight decline since the week ended June 10. It was also the sharpest fall since the week ended May 6.


For the first time since October 2002, the Dollar Index, which measures the U.S. currency to six other majors, surpassed 108 for the first time.


Indicators suggest that the US Consumer Price Index for June, which is expected to be released on Wednesday, will show no reduction in inflation, with analysts predicting an annual reading of 8.8 percent as opposed to 8.8 percent in May. The Federal Reserve's inflation tolerance is just 2% per year, and it has vowed to raise interest rates as much as required to achieve this objective.


Inflation ought to be advantageous for gold, given the yellow metal's long-standing reputation as a price pressure buffer and one of the greatest value stores. As a result of the dollar's surge in reaction to rate hikes, gold's "safe-haven" position has been hijacked by the dollar.


Gold is resistant to interest rate hikes. If the CPI does not decrease as quickly as predicted by the end of the year, there is a chance that the Fed may raise interest rates by 75 basis points per month for the next three months, beginning this month.


"Gold and inflation are engaged in a tug-of-war, with gold seeking to preserve its position. According to Ed Moya, an analyst at the online trading platform OANDA, Wednesday's blistering inflation data might bolster aggressive Fed rate hike forecasts for later this month and heighten anticipation for the September meeting.


"With Wall Street preoccupied on (whether) the Fed would plunge this economy into a recession, King Dollar will likely stay the trade, which is problematic for gold," Moya said.


After the CPI data and Wall Street bank signals on whether the U.S. consumer and economy are deteriorating more quickly than the majority of profit estimates imply, the Fed's expectations for its rate decision on July 27 will be cemented.


As if on cue, the New York Fed reported on Monday that more than half of the consumers it questioned this month said their household financial situation had worsened from a year ago, and almost half expect it to continue to deteriorate through 2023.

Suggestion