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The yield on Japans 40-year government bonds fell 2.0 basis points to 3.785%.On July 1st, European Central Bank (ECB) Governing Council member Demarco stated that the ECB should not rush into further interest rate hikes given the unexpectedly rapid decline in oil prices. The ECB raised rates in June, with its own forecasts based on further policy tightening. However, the rapid decline in energy costs in the following weeks strengthened the case for delaying further rate hikes. Demarco stated that lower energy costs should quickly alleviate inflation expectations and curb wage increases. This statement further strengthens the ECBs rationale for keeping rates unchanged this month, after several policymakers had previously called for patience and a pause in further action. Demarco stated that there is only reason to raise rates now if a second round of inflationary effects occurs, inflation expectations decouple, or wage increases become more prevalent. "We havent seen these scenarios yet, so given that oil prices have fallen back to levels similar to those before the conflict, we can wait for the next round of forecasts rather than hastily raising rates again and risking unnecessary damage to economic growth." He also noted that even in the more dovish scenario in the latest forecast, there is still an assumption of further policy tightening. Therefore, if future data confirms this scenario, the European Central Bank may still need to raise interest rates further.XPeng Motors: It is expected to launch the XPeng MONA L03 in China on July 2 and start pre-sales on the same day, followed by a global market launch in July.NIO: In June 2026, it delivered 40,597 vehicles, a year-on-year increase of 62.9%.XPeng Motors: Delivered 40,126 vehicles in June and 103,295 vehicles in the second quarter.

Forecast for Gold: XAUUSD retreats from $1800 on rising US yields

Daniel Rogers

Aug 12, 2022 11:59

 截屏2022-06-07 下午5.14.22.png

 

While it had been trending upwards, gold's daily performance took a sour turn and it is now trading below $1800. During the American session, the XAUUSD reached a high of $1799 before turning down and heading below $1785.

 

Despite predictions of a 0.2% monthly increase, data released on Thursday indicated that the US Producer Price Index decreased by 0.5% in July, bringing the annual rate down to 9.8%. The Consumer Price Index did not move in July, contrary to predictions of a 0.2% increase, according to data released on Wednesday. The US currency fell because of the inflation rate going down.

 

Investors continue to count on a rate hike of 50 basis points or more from the Federal Reserve at their September meeting. U.S. rates have risen despite though a peak in US inflation is more likely, which is surprising. Both the US 10-year yield (now at 2.83%) and the 2-year yield (3.20%) are at their highest levels in nearly a week.

 

Increased US yields capped gold's gains. The inability of the XAU/USD pair to maintain a price over $1800 despite the recent US data has fueled skepticism that the rally will continue. Weekly support is found around $1774, and the immediate support is at $1785. Additional gains appear likely if the price of gold can consolidate over $1800.


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