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On August 13th, U.S. Treasury Secretary Benson said in an interview that the Federal Reserves interest rate should be 150-175 basis points lower than it is now, and that if the data were accurate, the Fed could have cut rates earlier. Bessant believes a 50 basis point rate cut is possible, with a series of cuts likely starting in September. Regarding the selection of the Fed chair, he mentioned that they will cast a wide net, encompassing 10-11 people. He also stated that he had proposed establishing a "shadow Fed chair" but now believes it is unnecessary. Furthermore, Bessant believes the Fed does not need to resume large-scale asset purchases (QE). Regarding the jobs report, he expressed opposition to halting its release, but emphasized the need for reliable data. Some analysts say the probability of a 50 basis point rate cut by the Fed in September is now almost zero. For this to happen, another weak non-farm payroll report would likely be needed in September.According to CNBC: Two government officials revealed that the Trump administration is considering 11 candidates to succeed Federal Reserve Chairman Jerome Powell when his term expires in May this year, including three people who have never been publicly nominated before. The new candidates include Jefferies Chief Market Strategist David Zervos, former Federal Reserve Governor Larry Lindsey and BlackRock Global Fixed Income Chief Investment Officer Rick Rieder.On August 13, Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, stated in a statement: "Hong Kongs banking system is well-capitalized, adequately provisioned, and financially strong to withstand market volatility." While credit risks facing the banking system have increased in recent years amidst the ongoing macroeconomic challenges, the banks profit models remain unaffected. I would also like to take this opportunity to clarify earlier rumors regarding "bad banks." The establishment of "bad banks" is an extraordinary measure taken when banks face serious balance sheet problems and is completely inconsistent with the current sound operations and strong financial position of Hong Kongs banks.According to CNBC: US President Trump is considering David Zervos and Rick Rieder as Federal Reserve chairmen.U.S. Treasury Secretary Benson: (On the Trump-Putin meeting) Sanctions can be escalated or relaxed, and there may be a timeline. Europe needs to join us in these sanctions.

Gold Price Prediction: XAU / USD falls toward $1,793 support convergence as US Dollar yields rise

Alina Haynes

Feb 27, 2023 14:22

Gold price (XAU/USD) accepts offers to rise from a two-month low to around $1,808 on Monday morning. In doing so, the precious metal justifies the most recent uptick in the US Dollar, following a week-long decline, amid hawkish concerns surrounding the US Federal Reserve (Fed) and geopolitical concerns.

 

That said, the US Dollar Index (DXY) renewed its intraday high around 105.30, following the initial pullback from a seven-week high. In doing so, the dollar index against the six major currencies has strengthened for the fifth consecutive day.

 

The DXY's recovery from the intraday low can be attributed to the firmer US Treasury bond yields, as the US 10-year Treasury yields reverse the early-day declines of approximately 3.95 basis points. In addition, the two-year counterparts return to their greatest levels since November 2022, as bond bears approach the 4.83% level as of press time.

 

Fears of an Australian recession, decreased consumption in New Zealand, and a soft landing in the United States have contributed to the recent weakness of the XAU / USD. Concerns about a hawkish Federal Reserve could contribute to the precious metal's decline, particularly in light of last week's strong inflation indicators and policymakers' optimistic comments. It should be noted that the most recent rumors regarding additional Western sanctions against Russia and Beijing-Moscow relations also favor the Gold Bears.

 

It’s worth noting, however, that the S&P 500 Futures lick its wounds with mild gains after the Wall Street benchmark posted the biggest weekly slump of 2023.

 

A stronger US dollar and geopolitical worries keep the Gold price on the bears' radar. In the absence of top-tier data, the XAU / USD may be able to recover some of its losses. Traders must therefore keep an eye on the US ISM Manufacturing PMI, Services PMI, Durable Goods Orders, and China's official PMIs this week for unambiguous direction.


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