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NIS, a Russian-controlled oil company, said it has applied for a new license from the U.S. Treasury Department’s Office of Foreign Assets Control in order to continue operating after June 16.Bank of Japan: Governor Kazuo Ueda will submit written comments at the June meeting, but will not participate in the vote.It is understood that the British government is developing plans to revise the steel tariff system.According to Japans Kyodo News, Japan is negotiating with the U.S. Treasury Department to extend sanctions waivers for Russias Sakhalin-2 energy project.On June 10th, RBC Capital Markets (RCM) predicted that rising energy prices would continue to push up overall US inflation, with little prospect of significant relief in food prices, especially after recent reports of rising beef prices. The bank expects core CPI to rise 0.3% month-on-month in May, with year-on-year growth reaching 2.9%. RCM believes that higher jet fuel prices will continue to push up core services inflation, while a tight labor market and resilient wage growth limit further declines in core services inflation. Meanwhile, core goods inflation has been supported by rising new and used car prices in recent months, which has somewhat masked price pressures on trade-sensitive goods such as clothing, personal care products, and auto parts. Both the ISM manufacturing and services surveys show that business input costs are rising sharply. Recent PPI data indicates that businesses still have the pricing power to pass on higher costs to consumers. Therefore, RCM expects businesses to continue passing on upstream cost pressures in May, with both overall PPI and core PPI rising 0.6% month-on-month and year-on-year growth reaching 6.3% and 5.5%, respectively. Furthermore, a survey conducted by the National Federation of Independent Business (NFIB) in April showed a significant increase in the proportion of businesses planning to raise product prices over the next three months, approaching 30%. This indicates that the process of passing on business costs to end-user prices may continue throughout the summer, thus providing further support for inflation trends in the coming months.

Gold Exceeds $1,750 As Fed Members Urge Slower Rate Increases

Haiden Holmes

Nov 24, 2022 14:15

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The dollar fell on Thursday as the minutes of the most recent Federal Reserve meeting indicated that an increasing number of members advocated a slower rate of interest rate hikes.


The minutes, which were released on Wednesday, indicated that the Federal Reserve was growing increasingly concerned about the implications of its recent tightening of monetary policy on the economy and inflation. This year, the benchmark interest rate was raised by 375 basis points (bps), with four consecutive hikes of 75 bps.


However, markets now assign a likelihood of over 80% that the central bank will raise rates by a relatively small 50 basis points in December.


At 19:05 E.T., spot gold jumped 0.2% to $1,753.40 per ounce, while gold futures increased 0.2% to $1,350 per ounce (00:05 GMT). On Wednesday, following the release of the minutes, both assets increased by around 0.6%, while the dollar declined by 1%.


As inflation continues to trend well over the 2% annual target, Fed officials remain uncertain about the level at which U.S. interest rates will peak during this cycle of rate rises.


Next month's CPI inflation data for November will indicate if the nation's inflation rate is falling gradually. However, the strength of consumer spending and the labor market suggests that inflation in the next months may be higher than anticipated.


Notwithstanding, the likelihood of fewer rate hikes by the Fed is good for metal markets, given that this year's big increases in interest rates have significantly raised the opportunity cost of holding non-yielding assets.


Platinum futures increased by 0.2%, whilst silver futures increased by 1.0%.


As a major importer, China is seeing a decline in demand for industrial metals, limiting the sector's growth.


Following a 0.5% advance in the previous session, copper futures decreased 0.1% on Thursday.


While dollar weakness aided copper prices, concerns over China's largest COVID-19 outbreak to date dampened metal demand. As a result of a record-breaking surge in daily infections, the country has enacted new restrictions in a number of major cities this month.


Indications of a tighter copper supply this year have been mostly offset by Chinese demand.

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