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May 31 - A Bloomberg survey of economists median forecast indicates that the U.S. unemployment rate will remain unchanged at 4.3% in May, while nonfarm payrolls will increase by 89,000. This increase would push the three-month average job growth rate to its highest level in over a year, sparking discussions about a continued acceleration in hiring. Forecasters expect the healthcare sector to maintain its strong momentum, while cyclical sectors such as construction, leisure, and hospitality will also see a recovery, with demand in these sectors likely benefiting from the warm weather of the past month. Manufacturing employment may also be boosted as consumers stockpile goods in anticipation of potential price increases following a potential conflict with Iran.On May 31, according to Iranian state television, Saeed Ajorlou, a member of Irans Media Committee, stated on Saturday that Tehran had not yet approved the final draft of the proposed agreement with the United States, and warned that Iran might withdraw from the agreement if the US failed to fulfill its commitments. In an interview, Ajorlou said that to his knowledge, as of Friday evening, the final text had not been approved, but the differences between the two sides were minimal. He stated, "If the final text is approved, we will enter a 60-day phase of detailed consultations," adding that each of the 14 articles of the agreement contains annexes that require further negotiation. Ajorlou emphasized that the implementation mechanism is more important than the text itself, especially regarding the acquisition of Iranian assets and the fulfillment of commitments by the other side. He stated that the proposed agreement includes a clause allowing Iran to withdraw from the agreement if the other side fails to fulfill its commitments. He indicated that Iran could withdraw from the agreement if violations occur, including breaches of the ceasefire agreement, failure to grant access to Iranian funds, or failure to lift the naval blockade. He added that if commitments are not fulfilled in the initial phase, Iran will reconsider its participation in the proposed 60-day negotiations.The Indian government stated that the current consumption tax rates for gasoline and diesel consumed domestically will remain unchanged.On May 31, local time, Ibrahim Rezaei, spokesman for the Iranian Parliament’s National Security and Foreign Policy Committee, said on May 30 that the naval blockade against Iran “will eventually end, whether through negotiations or military action.”According to the Financial Times, SoftBank has pledged €75 billion to build Europe’s largest artificial intelligence facility in France.

Gold Price Prediction: XAU/USD falls below $1,800 as yields increase. Focus on central banks and Fed-inflicted wounds

Daniel Rogers

Dec 15, 2022 11:29

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Gold price (XAU/USD) stays in the red near $1,800 as the US Dollar recovers from a six-month low despite traders' reevaluation of Federal Reserve (Fed) remarks on Thursday morning. Also likely to have benefitted XAU/USD sellers is the cautious sentiment preceding key central bank announcements.

 

As anticipated, the Fed raised rates by 50 basis points and changed the dot plot to indicate a terminal rate of 5.1%, up from 4.6% in September's Statement of Economic Projections (SEP). The US central bank also updated inflation projections upward, while growth projections for 2023 and 2024 were reduced. In addition, Fed Chairman Jerome Powell defended his image as a hawk while saying that the ultimate level of interest rates is more significant than their rate of change. The official noted that the Federal Open Market Committee (FOMC) must maintain peak interest rates until policymakers are "very certain" that inflation would decline in a sustainable manner.

 

Following Fed statements, US markets closed on a downbeat note, while US Treasury bond yields also declined. In spite of this, 10-year US Treasury note rates are testing a two-day downtrend near 3.50 percent, while the two-year counterpart extends its recovery from the monthly low and posts its first daily gain near 4.25 percent in three days.

 

As a result, the US Dollar Index (DXY) recovers at 103.75, while rebounding off a one-month-old support level and a six-month low.

 

Gold traders should pay close attention to the numerous central bank announcements, beginning with the Swiss National Bank (SNB), European Central Bank (ECB), and Bank of England (BOE), for clear direction. Amidst hawkish expectations and inverse relationships with the U.S. dollar, the ECB will garner the most attention among them. Consequently, the optimistic results of central bankers may weigh on the Gold price going forward.

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