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On April 26, UBS said that the current market thinking is consistent with the banks basic forecast, that is, tariffs will be reduced from the current announced level for the rest of the year, and the Federal Reserve will further cut interest rates this year. However, as uncertainty in trade, economy and Federal Reserve policy remains high, expected volatility also remains high. However, UBS believes that the US stock market is attractive, and the S&P 500 index target continues to be 5,800 points by the end of the year. UBSs current basic forecast is that the Federal Reserve will cut interest rates by 75 to 100 basis points this year, but in the short term, the Feds policy flexibility seems more limited because it must balance concerns about economic growth with the risk of inflation recovery.According to AFP: Senior officials said that Ukrainian President Zelensky and US President Trump may meet in Rome.Spokesman for Ukrainian President Volodymyr Zelensky: Ukrainian President Volodymyr Zelensky has arrived in Rome to attend the Popes funeral.According to the Ukrainian National News Agency: Russian troops launched 414 attacks in the Zaporizhia region at night.Market news: Ukrainian President Zelensky and his wife arrived in Rome.

Gold Price Prediction: XAU / USD corrects to around $1,910 despite intensifying concerns of a global banking crisis

Alina Haynes

Mar 16, 2023 14:00

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After reaching a new six-week high at $1,937.39, the gold price (XAU/USD) displayed a corrective move during the Asian session. As gold's allure is extremely strong amid growing concerns about the global banking crisis, a correction in the precious metal appears to be short-lived. Credit Suisse's debacle following the failure of Silicon Valley Bank (SVB) has triggered the risk of global financial instability, and uncertainty over the Federal Reserve's (Fed) upcoming interest rate decision has bolstered the case for the Gold price.

 

S&P500 futures have shown a recovery move following Wednesday's sell-off as investors assess the banking sector's uncertainty. However, the motif of risk aversion has not yet completely subsided.

 

During the Asian session, the US Dollar Index (DXY) is fluctuating in a narrow range of around 104.60. It appears that the impact of banking sector turmoil is maturing for the USD Index, and investors are beginning to discount expectations for next week's monetary policy. According to the CME FedWatch instrument, the probability that Fed chair Jerome Powell will raise interest rates by 25 basis points (bps) has risen above 70%. While 30% of the probabilities support maintaining the current interest rate policy.

 

Increasing odds of a status quo monetary policy are supported by a declining Consumer Price Index (CPI), a rising Unemployment Rate, sluggish Retail Sales, and a declining Producer Price Index (PPI).


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