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February 3rd - According to foreign media reports, the European Union will propose a partnership with the United States to establish key mineral resources. Sources familiar with the matter revealed that the EU is prepared to sign a memorandum of understanding with the US within three months, outlining a "strategic partnership roadmap" aimed at jointly exploring supply channels for key minerals. The memorandum of understanding recommends that the EU and the US explore joint key mineral projects and study price support mechanisms, while also suggesting measures to prevent external mineral oversupply and other forms of market shocks. The EU memorandum of understanding mentions the possibility of establishing key mineral reserves, which is also a key focus for Trump. The proposal also points out that both sides should establish secure supply chain systems between them. Notably, the EU proposal also emphasizes that both sides should respect each others territorial integrity. Trumps previous indication of intent to acquire Greenland nearly caused a breakdown in US-EU relations recently.February 3rd - Danske Banks Stefan Mellin stated in a report that the short-term risk balance has shifted in favor of a stronger dollar following Trumps nomination of Warsh as Federal Reserve Chair. The nomination appears to have eased market concerns about a potential threat to the Feds independence and prompted a partial reversal of the political risk premium previously priced into the dollar. He pointed out that the dollar sell-off in late January was primarily driven by political risks stemming from the unpredictability of US policy. Therefore, the easing of short-term political uncertainty could "restore the dollars correlation with fundamentals and create a tactical window for a dollar rebound."A Republican caucus in the U.S. House of Representatives accused Big Tech companies of conducting censorship in order to comply with European Union requirements.U.S. Trade Representative Greer: The Supreme Court tariff case is not an “obvious” outcome for the plaintiffs; the stakes in the tariff case are extremely high.U.S. Redbook retail sales annualized at 6.7% for the week ending January 30, compared with 7.1% previously.

Fed Statements Restrict Gold Price Increases After A Fall

Haiden Holmes

Nov 22, 2022 14:55

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On Tuesday, gold prices rose, but remained at two-week lows as hawkish comments from some Federal Reserve members strengthened the dollar, while platinum prices jumped in anticipation of a potential supply shortage next year.


On Monday, metal markets fell in tandem with other asset classes as investors panicked about the possibility of a worldwide recession caused by increasing interest rates. Moreover, fears over future COVID-related restrictions reduced mood. However, this allowed for the discounted purchase of certain metals.


Spot gold jumped 0.3% to $1,740.98 per ounce around 20:25 E.T., while gold futures advanced 0.1% to $1,742.50 per ounce (01:25 GMT). Monday showed a roughly 0.8% decrease for both assets.


Monday, Mary Daly, president of the Federal Reserve Bank of San Francisco, noted that there was more work to be done to tighten monetary policy and decrease inflation, and that the real-world impact of recent rate rises will likely be more than implied by the short-term target rate.


Loretta Mester, president of the Federal Reserve Bank of Cleveland, has suggested that she supports a smaller rate hike in December, in keeping with market expectations for a 50 basis point basis point increase.


However, both Fed governors indicated that future rate increases will be substantially dependent on U.S. economic data, particularly the inflation trajectory.


As the prospective cost of holding non-yielding assets surged this year, a series of sudden interest rate rises had a disproportionately negative effect on metal markets.


In recent weeks, as markets have braced for a smaller rate rise in December, gold's 2017 losses have been significantly reduced. However, given that inflation is far above the Fed's 2% target, investors are also assessing the possibility that the central bank may continue to hike interest rates for a much longer amount of time than expected.


This situation is negative for gold and the whole metals market. The release of the Federal Reserve's November meeting minutes on Thursday will give fresh insight into U.S. monetary policy.


After the World Platinum Investment Council declared on Tuesday that it expected a shortage of the metal in 2023, the price of platinum futures rose by around 1 percent.


The valuable metal serves a variety of purposes, including automotive exhausts, industrial applications, and jewelry.


Among industrial metals, copper prices rose on Tuesday, following recent severe losses.


Tuesday's 0.8% climb to $3.6075 per pound in copper futures followed Monday's 1.6% fall. New COVID lockdowns in China have significantly lowered the outlook for the red metal, which is anticipated to weigh on demand.

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