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Futures Commentary by Everbright Futures: Market sentiment was alternately dominated by US macroeconomic data and geopolitical tensions, with gold experiencing its strongest weekly performance this year last week. Since the second half of the year, gold price movements have shown signs of desensitization to US-Iran geopolitical tensions, with market focus primarily on whether the Federal Reserve "dares" to raise interest rates. Previously, US economic data showed resilience, but inflation data was somewhat stubborn, leading to a surge in expectations of a rate hike, particularly with the probability of a rate hike at the Feds September meeting rising. However, with the weakening performance of US stocks at their high levels and the instability of employment data, the market questioned the Feds, especially Warshs, "hawkish" approach. The unexpectedly weak non-farm payroll data directly shattered previous market pricing in a September rate hike, causing US Treasury yields and the dollar to weaken in tandem, reinforcing the view that the US is struggling between high debt and persistent inflation. Furthermore, while previous outflows from gold ETFs dealt a blow to the market, data from the World Gold Council showed that central banks made a record net purchase of 289 tons of gold in the second quarter, with the Peoples Bank of China increasing its gold purchases for five consecutive months, further boosting market confidence. Therefore, overall, the view that the current position is the bottom range for gold is becoming more solidified, and it is advisable to buy on dips. In the short term, attention should be paid to whether there is a risk of profit-taking due to short-term emotional euphoria after golds continuous rise.The Central Bank of Uzbekistan reported that its gold and foreign exchange reserves totaled $64.347 billion in July (up from $63.757 billion previously).Euro Stoxx 50 futures fell 0.02%, German DAX futures fell 0.02%, and UK FTSE 100 futures fell 0.39%.CEO of Abu Dhabi National Oil and Gas Company: We will continue to closely monitor the situation in the Strait of Hormuz and consider various options.August 10th - According to the latest mobile phone industry research from TrendForce, rising component prices, particularly memory chips, are pushing up the overall cost of Apples upcoming iPhone 18 series. Taking the 256GB versions BOM (Bill of Materials) cost as an example, the estimated annual increase is around 38%, inevitably leading to a higher selling price. To avoid impacting consumer purchasing decisions, Apple may control the price increase by reducing profit margins in exchange for market share expansion.

Gold Falls Below $1,900; The dollar Soars As The Fed Prepares to Double Its Rate Hikes

Charlie Brooks

Apr 26, 2022 09:57

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On Monday's session on the New York Comex, an ounce of the yellow gold returned to the $1,800 level.


This came as the dollar strengthened on expectations that the Federal Reserve would hike rates by 50 basis points, or half a percentage point, at its May policy meeting next week — more than double the 25 basis points, or quarter point, approved in March, the first increase in the post-pandemic era in the United States.


On Monday, Comex front-month gold futures for June finished down $38.30, or 2%, at $1,896 an ounce. On April 18, June gold reached a six-week high of $2,003 on concerns that the US could enter recession as a result of strong Fed attempts to rein down inflation. Gold is frequently used as a hedge against economic and political uncertainty.


Over the last week, a series of Fed speakers assuaged market concerns that the economy would turn negative as a result of the central bank's efforts to contain price pressures developing at their highest rate in 40 years.


While fears of a hard landing have not completely vanished, optimism, particularly regarding the sterling job market, has won over some pessimists. This has resulted in the dollar surging – the primary beneficiary of a rate hike — at the expense of gold and other safe-haven assets.


The Dollar Index, which compares the US currency to six main rivals, touched a 25-month high of 101.745 on Monday.


US bond yields, which frequently move in lockstep with the dollar, have recently decoupled from the greenback. The yield on the US 10-year Treasury note fell for the third consecutive day, dropping about 4% on the day.


While risk aversion across the board drew investors to safe-haven assets, gold's near-term charts showed the possibility of a rebound to the $1,900 lows, at the very least, following the week's loss of more than $100. 


"Gold has begun to exhibit oversold conditions on a daily basis, which may result in a short-term relief rally, albeit not necessarily a reversal," Dixit explained. "The $1,925 to $1,935 level remains a hurdle, but a rebound is probable." If history is any guide, gold will almost certainly find buyers at lower prices."


On the other hand, he noted, a Comex settlement below $1,888 will exacerbate gold's troubles.

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