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The U.S. EIA natural gas storage data for the week ending October 31 will be released in ten minutes.The CEO of the London Stock Exchange Group has written to the UK government, urging the UK occupational pension default fund to invest at least 25% of its funds in UK assets in order to maintain its regulatory advantage.November 6th - ING analysts stated that the pound is likely to remain weak, but a significant drop from current levels is unlikely in the short term. They pointed out that with the market recently raising its expectations for interest rate cuts, the Bank of Englands easing cycle has been largely priced in, suggesting that the terminal interest rate could be as low as 3.25% next summer. Analysts said, "Unless the budget includes significant fiscal tightening, further lowering the price-cutting cycle for the Bank of England, a credible budget might be sufficient to slightly reduce the risk premium in UK government bonds and the pound." ING expects the euro to remain around 0.88 against the pound before the budget announcement on November 26th.A U.S. federal appeals court has given Trump a new opportunity to present evidence again that the hush money criminal case should fall under the jurisdiction of a federal court.On November 6th, TD Securities strategists stated in a report that the pound is expected to underperform other G10 currencies as the UK budget meeting on November 26th approaches. The strategists pointed out that the UKs fiscal maneuvering space is extremely limited, and the dollar is likely to maintain its recent strength for some time during the ongoing US government shutdown. The report stated, "The pound appears structurally undervalued around the 1.30 level, but a reversal in dollar sentiment is needed for it to strengthen again after the budget risk event." A catalyst for a weaker dollar could be the end of the US government shutdown and the resumption of official economic data releases, which could signal a potential Fed rate cut in December.

Forecast for the Gold Price: XAU/USD moves up above $1,850 as yields fall following FOMC minutes

Daniel Rogers

Jan 05, 2023 15:01

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In the late New York session, the gold price (XAU/USD) has attracted buying activity following a corrective move to approach the critical support of $1,850. After failing to sustain above $1,860.00, the precious metal declined; however, the corrective move is light and does not indicate a serious reversal.

 

After a decline in the U.S. Manufacturing PMI bolstered indications of further deceleration in the U.S. Consumer Price Index, market participants' demand for risk-perceived assets such as the S&P 500 increased (CPI). In response to a decrease in product demand, corporations may be compelled to reduce the price of factory items.

 

The US Dollar Index (DXY) fell below the 104.00 level as yields on 10-year US Treasuries were subjected to intense pressure and plummeted to roughly 3.69 percent. Safe-haven assets are under pressure due to the anticipation of a further fall in inflationary pressures. After remaining aggressive throughout the entire year, Federal Reserve (Fed) head Jerome Powell changed to a slowing scenario in December regarding an interest rate hike. Undoubtedly, the inflation rate is still a significant distance from the 2% target; yet, the presence of factors that support a further deceleration in the price index weighs on safe-haven assets.

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