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On December 19th, according to Futures News, crude oil prices continued to rise slightly, and the news in the fuel oil market improved somewhat. However, the supply and demand of various products still differed, and refineries shipped at different paces. Market participants lacked confidence in future trading, and most purchases were small orders for immediate needs. It is expected that fuel oil trading will continue to be stable in the short term.On December 19th, Goldman Sachs predicted that the Bank of England will cut interest rates three times in 2026. Previously, the bank had predicted cuts in February, April, and July; it has now revised its forecast to March, June, and September. Goldman Sachs pointed out that slowing hiring, rising unemployment risks, and easing wage pressures are the main reasons supporting rate cuts. Although the market is currently pricing in a relatively moderate pace of rate cuts, if data confirms weakening economic activity and anchored inflation expectations, the Bank of Englands rate cuts could be more aggressive than investors anticipate. For the market, a deeper easing cycle could put pressure on the pound while supporting UK risk assets.SK Hynixs gains widened to 2.5% in early trading.The Society of Motor Manufacturers and Traders (SMMT) reported that UK car production fell 14.3% year-on-year in November, with 65,932 passenger and commercial vehicles produced.The UKs GfK consumer confidence index for December was -17, compared to a forecast of -18 and a previous reading of -19.

Gold Price Prediction: XAU/USD declines near $1,750 as risk aversion anticipates NFP data release

Alina Haynes

Aug 02, 2022 15:03

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During Tuesday's opening European session, the gold price (XAU/USD) deepens its retreat from a nearly three-month-old resistance line, falling below $1,773. In spite of this, the precious metal exhibits a five-day rise around the greatest levels since July 5.

 

The metal's early-day rally may have been influenced by a broad dollar decline and Treasury rates. The XAU/USD exchange rate afterwards looked to have been influenced by China-related news and rising worries of an economic downturn.

 

Nonetheless, the visit of US House Secretary Nancy Pelosi to Taiwan and the probable difficulties for Chinese chipmakers as a result of the U.S. consideration of banning supplies of American chipmaking equipment further weigh on market mood. Similarly, a Chinese media story may indicate that the dragon country is prepared for a military exercise in Bohai, South China Sea.

 

In addition, Bloomberg's report that Beijing's Gross Domestic Product (GDP) has no fixed limits tends to dampen the market's risk appetite. People acquainted with the situation were quoted in the press as saying, "China's top leaders instructed government officials last week that this year's economic growth objective of "about 5.5 percent" should serve as guideline rather than a mandatory aim."

 

It should be emphasized that China is one of the world's largest users of gold, and that bad news stories about the country might impact on gold prices.

 

Elsewhere, the recently poor US PMIs mirrored last week's US Gross Domestic Product (GDP) for the second quarter to illustrate economic anxiety. Fed Chair Jerome Powell's veiled warnings that the hawks are losing steam might also dampen sentiment.

 

As a reflection of market mood, equities in the Asia-Pacific region and US stock futures see modest losses. However, the US 10-year bond yield decreases 5.5 basis points (bps) to 2.55 percent at the latest, threatening the gold bears via the weakening US dollar. In spite of this, the US Dollar Index (DXY) reestablished the monthly minimum before rebounding from 105.00.

 

The news concerning China and the recession, as well as the remarks of Chicago Fed President Charles L. Evans and Federal Reserve Bank of St. Louis President James Bullard, will be crucial for intraday gold dealers in the future.


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