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The China Earthquake Networks Center officially reported that a magnitude 3.3 earthquake occurred at 18:50 on March 28 in Yecheng County, Kashgar Prefecture, Xinjiang (36.03 degrees north latitude, 77.71 degrees east longitude), with a focal depth of 57 kilometers.March 28th - According to the website of the China Maritime Safety Administration, the Dalian Maritime Safety Administration issued a navigation warning stating that from 16:00 on March 29th to 16:00 on April 5th, military operations will be conducted in the Bohai Strait and the northern Yellow Sea, and entry is prohibited.Israel Defense Forces: The Israel Defense Forces have just completed another round of strikes against Iranian terrorist regime infrastructure in Tehran. More details will be released later.March 28th - Following the largest sell-off in years, bargain hunters began entering the gold market. By Thursdays close, gold prices had fallen 19% from their January closing peak, nearing the traditional 20% threshold that marks the start of a bear market. However, on Friday, buyers re-entered the market, pushing prices up by about 3%. George Efstathopoulos, a fund manager at Fidelity International, stated that this pullback presents a buying opportunity once tensions in the Middle East subside. Inflation risks, fiscal pressures, and bond creditworthiness issues remain structurally positive factors for gold. Analysts also pointed out that a war in Iran could trigger central bank gold sales, or at least slow down the pace of purchases. Daniel Galli, a commodities strategist at TD Securities, believes that given central banks have been cornerstone buyers in this bull market, a large-scale, direct sell-off would have a more direct impact on prices and a more damaging effect on market sentiment. However, for now, the broader trend is likely a gradual slowdown in the pace of central bank gold purchases, rather than a complete sell-off.March 28 – Malaysian Foreign Minister Mohamed said on the 28th that the Iranian government had allowed several Malaysian oil tankers stranded in the Strait of Hormuz to pass. Mohamed told the media that day that given the current tensions in the Middle East, although the tankers had been granted passage through the Strait of Hormuz, they still needed to wait for a suitable "window of opportunity."

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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