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On December 12th, several major German economic research institutions released their winter forecast reports on the 11th, indicating that the German economy is expected to grow by only 0.1% in 2025, a further downward revision from the 0.2% growth forecast in the autumn, due to factors such as a significant decline in exports to the United States. The reports stated that the continued large-scale tariffs imposed by the United States are putting pressure on the global economy and trade, while the German economy is undergoing profound structural changes. The reports project German economic growth of 0.8% and 1.1% in 2026 and 2027 respectively, both down 0.5 percentage points from previous forecasts.On December 12th, Citigroup interest rate strategists stated in a report that, based on inquiries with clients, the market is highly focused on the extent to which Eurozone government bond supply will be front-loaded in 2026. They believe this focus is "understandable." The report anticipates that 2026 will continue the usual supply pattern, with most annual bond issuances completed in the first quarter. Citigroup projects first-quarter government bond supply to reach €495 billion, approximately 34% of the estimated total financing demand for the following year.On December 12th, the General Office of the Ministry of Industry and Information Technology released the "Implementation Plan for the Civil Explosives Industry to Implement the National Intelligent Manufacturing Standard System Construction Guidelines." The plan proposes that by 2030, a total of 30 intelligent manufacturing standards for the civil explosives industry will be formulated or revised, establishing a relatively complete intelligent manufacturing standard set for the industry. Combining the development trends of intelligent manufacturing technology with the practical foundation of the civil explosives industry, the plan promotes the exploration of typical application scenarios of advanced intelligent manufacturing technologies in the industry, adhering to the principle of "overall planning and prioritizing urgent needs," and orderly advancing the development of industry standards.December 12 – Indonesia is expected to reach a trade agreement with the United States by the end of the year, with both sides facing increasing pressure to resolve differences that could jeopardize bilateral relations. Jakartas Coordinating Minister for Economic Affairs, Airlangga Hattato, stated on Friday that Indonesia will send a delegation to Washington next week for consultations. This comes after senior officials from both sides "agreed to finalize the consensus reached by the two leaders on July 22." In July, the US and Indonesia reached a trade framework agreement; however, US officials subsequently claimed Indonesia had broken its promises, while Indonesia rejected US demands, fearing they would undermine its independence, particularly in key mineral and energy sectors. Previous reports indicated that Indonesia particularly opposed a clause in the agreement that would allow the US to cancel the agreement if Indonesia signed it in a way deemed detrimental to US interests.December 12th - It was learned today from the State Administration for Market Regulation that in the first three quarters of this year, market regulators organized special campaigns such as intellectual property law enforcement to further strengthen governance in key areas, key commodities, and key markets, and actively leverage the deterrent power of administrative law enforcement. In the first three quarters, these special campaigns investigated and handled nearly 390,000 related cases, including 27,000 cases of trademark infringement and patent counterfeiting. Approximately 54,000 enforcement actions were carried out against key entities where infringement and counterfeiting are frequent.

Gold Price Prediction: XAU/USD bears anticipate a Fed rate hike near $1,660

Alina Haynes

Sep 21, 2022 14:35

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Wednesday's Asian session gold price (XAU/USD) reflects pre-Fed nervousness as bears flirt with $1,665 inside an immediate trading range. In addition to geopolitical concerns, the hawkish Fed bets create downward pressure on the metal. However, the market's consolidation prior to significant central bank announcements and the already-priced 0.75 basis point Fed rate hike appear to be testing the bears.

 

Reuters reported that the Federal Reserve began a two-day meeting on Tuesday, with rate futures traders pricing in an 83% chance of a 75 basis point raise and a 17% possibility of a 100 basis point tightening. The news adds to rising expectations that a positive surprise will weigh on the XAU/USD exchange rate. The previous day, global economist Nouriel Roubini endorsed metal bears and joined the band of supporters for the Fed's 1% rate hike.

 

In addition, the news of a sudden shutdown in the steel center of Tangshan due to China's zero covid policy recently rocked market confidence and boosted demand for the US dollar. In a similar vein might be the revelation that US Senators are seeking secondary sanctions on Russian oil.

 

In addition, the Asian Development Bank (ADB) lowered its growth predictions for emerging Asia in 2022 and 2023 on Wednesday, citing growing risks from increased central bank monetary tightening, the consequences from the conflict in Ukraine, and COVID-19 lockdowns in China. The news exerts a downward impact on mood and the XAU/USD exchange rate.

 

Regarding US statistics, the yields appeared to support DXY bulls on the back of generally positive US housing data. The nine-month decline in the US NAHB Housing Market Index preceded the August decrease in Building Permits to 1.517M from 1.61M expected and 1.68M previously. However, Housing Starts increased to 1.575 million compared to the market consensus of 1.445 million and previous readings of 1.404 million.

 

During the pre-Fed period of apprehension, the 2-year US Treasury yield reached its highest level in 15 years, while the 10-year yield reached its highest level in 11 years. Consequently, Wall Street's benchmarks closed in the negative, while the S&P 500 Futures remain undecided.

 

While the market's hesitation is mostly attributable to pre-Fed jitters, other central banks are also scheduled to influence the markets and gold prices. However, the focus will be on their ability to prevent recession while attempting to control inflation. If the Fed can persuade optimists of their capacity, a XAU/USD comeback cannot be counted out.


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