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Citigroup: Raised its target price for McDonalds (MCD.N) to $381 from $373 previously.Polish Energy Minister: Poland is ready to support EU member states in continuing to purchase Russian energy.Susquehanna International: Raised the target price for Micron Technology (MU.O) to $200, from $160 previously.Gold options data show that before the Feds decision, the Put/Call ratio continued to rise but was still below 1, indicating that bullish expectations still prevailed, but short- and medium-term precautions against pullbacks increased; the transaction ratio returned to around 0.5, the short-term short-selling momentum weakened, and the market was more inclined to oscillate or slowly rise. The high probability range rose from 15% to nearly 19%, and the slope became steeper, especially above 3680-3700 (spot price of about 3673-3693), indicating that "high prices mean strong waves", and once it breaks through, it is easy to trigger a rapid saw-saw and a false breakthrough. Strategically, pay attention to the gains and losses of 3680-3700: if the position ratio is greater than 1 and the implied volatility continues to rise and approaches 20%, tend to reduce positions at highs and defend retreat; if the transaction ratio continues to weaken toOn September 17th, ahead of the Federal Reserves interest rate decision (widely expected to be a 25 basis point rate cut), long-term U.S. Treasury yields edged lower, with the 10-year yield approaching 4%. Short-term Treasury yields were largely unchanged, as the market has already priced in a rate cut. However, if the decision includes any comments on future interest rate trends, yields could fluctuate. "Bond investors remain cautious, and we expect yields to react," said Frank Walbaum of Naga in a report. The market analyst noted that weakening economic expectations or policy guidance for further rate cuts could lead to further declines in Treasury yields and the US dollar; however, a more cautious signal could provide temporary relief.

Gold Declines As The Dollar Rises Ahead of The Fed Meeting

Skylar Williams

Jan 31, 2023 11:33

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Gold prices declined on Tuesday, under pressure from a stronger dollar and heightened caution ahead of this week's Federal Reserve meeting, as broader metal markets also declined.


The yellow metal had a sluggish start to the week ahead of the end of a two-day Fed meeting on Wednesday, where the central bank is widely anticipated to hike interest rates by 25 basis points.


However, its stance on monetary policy will be a major focus, as recent U.S. economic data suggests the central bank may have room to hike interest rates further.


Spot gold decreased 0.1% to $1,922.10 per ounce as of 18:59 ET (23:59 GMT), while gold futures were subdued at $1,922.75 per ounce.


Ahead to the expiration of the futures contract, the spot price surpassed the futures price, showing that near-term demand for gold remained robust.


The yellow metal mounted a fantastic rebound in late 2022 and early 2023 as milder inflation readings from the United States stoked anticipation that the Federal Reserve will raise interest rates at a slower pace in 2023.


The markets were confused as to where U.S. borrowing rates will peak, given that inflation is still considerably above the Fed's yearly target. The Fed has also warned that persistent inflation could result in longer-lasting rate increases.


This week, the dollar strengthened versus a basket of currencies, putting pressure on metal markets.


A combination of rising interest rates and high inflation is anticipated to impact economic growth this year, hence increasing the likelihood of a global recession. Gold has also profited from the quest for safe havens.


Data on Eurozone economic growth for the fourth quarter, due later in the day, is also anticipated to give more information on the likelihood of a recession. However, as investors anticipated the Fed meeting, the dollar became their chosen safe haven.


Futures for platinum were unchanged at $1.017.15 per ounce, while futures for silver declined 0.3% to $23.668 per ounce.


Copper prices fell among industrial metals due to a stronger dollar and fears of a recession.


Futures for high-grade copper remained unchanged at $4.1833 per pound after falling nearly 1% in the previous session.


The potential of a disruption in supply from the world's second-largest copper producer, Peru, which is experiencing heightened civil upheaval following the impeachment of President Pedro Castillo, provided little support for red metal prices.


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