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On August 26th, Tang Daosheng, Senior Executive Vice President of Tencent Group and CEO of the Cloud and Smart Industries Group, published an article in Tencents internal publication addressing external criticisms that "Tencent is slow in its AI development." He responded that its impossible not to feel anxious. "The Hunyuan large-scale model has undergone multiple reconstructions. Hunyuan Hy3 performs exceptionally well among large models with similar parameters, but due to the companys overall insufficient computing power, model training and product development have been slowed down, resulting in significant impacts." Tang Daosheng stated that getting started early may not be the most crucial factor; the second half of the AI era has only just begun. Only by persevering can one seize the continuously emerging new opportunities.On August 26, European Central Bank Executive Board member Schnabel stated that the protracted Middle East conflict, coupled with unexpectedly strong Eurozone economic performance, poses upside risks to inflation, necessitating further interest rate hikes. Consumer price increases could exceed 2% for an "extended period," and policymakers will be behind the curve if action is delayed until these effects are transmitted to wages. She stated, "At current interest rates, inflation is unlikely to return to the target level in the medium term, thus requiring further policy tightening. Especially given the current resilient aggregate demand, preventing a second round of effects early is crucial, as acting too late may require more aggressive tightening measures." She pointed out that fiscal policy, increased defense spending, and the global AI boom are key drivers of strong economic growth. Schnabel warned that energy price pressures, excluding oil, are becoming more persistent. Given low European gas inventory levels, the gas market is particularly worrying, "posing a substantial upside risk to inflation. The longer the conflict lasts, the greater the risk and intensity of indirect and second-round effects."Tibo, Product Manager at OpenAI Codex: Good products take time. At least 34 days.ANZ Bank now expects the Reserve Bank of Australia to raise interest rates by 25 basis points in November.August 26th - As markets closely watch for clues about the timing of the Bank of Japans next interest rate hike, BOJ watchers will be closely monitoring Deputy Governor Ryozo Himinos speech on Thursday. SMBC Nikko Securities strategist Ataru Okumura stated, "While there are limitations to how much a single speech by a BOJ deputy governor can guide market expectations, the focus will be on how firm his wording is on controlling inflation." Okumura added that although the bond market firmly expects the BOJ to raise rates sooner rather than later, investors doubt the banks ability to push rates above the restrictive level of 2%, making the future path of interest rates a key focus for the market.

Gold Faces New Challenges as the Dollar Prevents a Return to $1,800

Haiden Holmes

Aug 04, 2022 10:57


Today, gold bulls seldom see more than two weeks of continuous increases.


On Wednesday, it looked that longs in the yellow metal had exhausted their two-week pass following the dollar's surge on fresh anticipation of greater U.S. rate hikes, which halted gold's recent rally and short return to $1,800.


The gold futures contract for December on the New York Comex fell by $13.30, or 0.7%, to $1,776.40 per ounce. The previous day, it touched a near-monthly peak of $1,805.


The spot price of bullion, which some traders monitor more closely than futures, remained at $1,765 after dipping slightly below $1,755.


The Dollar Index, which measures the dollar to six major currencies led by the euro, rebounded from Tuesday's three-week low of 104.9 to hit a one-week high of about 106.7.


Regional heads of the Federal Reserve, such as James Bullard of St. Louis, Mary Daly of San Francisco, and Loretta Mester of Cleveland, have declared in recent days that the central bank will continue to hike interest rates to battle inflation that remains stubbornly above four-decade highs. Consequently, the dollar recovered its strength.


The Federal Reserve is perplexed as to why inflation, as measured by the Consumer Price Index, has not declined from four-decade highs, expanding at a rate of 9.1 percent in the year leading up to June, despite four rate hikes since March that have raised rates from near zero to as high as 2.5 percent.


According to San Francisco Fed President Daly, the economy is not at risk of another 'Great Recession,' and the United States can withstand a third consecutive 75-basis-point rate increase if necessary.


"A 50 basis point increase in September would be appropriate," Daly stated in a live-streamed lecture regarding the anticipated size of the next Fed rate hike. "However, if inflation continues to rise uncontrolled, an increase of 75 basis points could be more appropriate. I do not expect another Great Depression to occur."


Some observers consider the United States as being in a recession after two straight quarters of negative GDP growth in the first half of this year. The so-called Great Recession started in 2008/09, when a market crash triggered a global financial crisis.


Jerome Powell, chairman of the Federal Reserve, acknowledged last week that the central bank cannot predict whether it would sustain the dramatic rate hikes it has conducted since March to battle inflation. This resulted in a gold price movement toward $1,800.


Since August 2020, when it reached record highs above $2,100, gold has failed to live up to its reputation as a hedge against inflation for the most of the previous two years. The dollar's ascension, which is up 11 percent this year and 6 percent in 2021, has contributed.

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