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The US representative to the United Nations stated that any easing of sanctions on Iranian oil would be "very short-lived" and limited in duration.March 21 – According to the Financial Times, the European Commission has urged member states to lower their natural gas storage targets and adopt a gradual approach to replenishing reserves in order to alleviate market demand pressures. This comes after the war with Iran impacted key suppliers and triggered a surge in energy prices. EU Energy Commissioner Jorgensen instructed EU energy ministers not to rush to replenish their depleted gas reserves in the face of supply shortages, but to utilize flexibility to reduce demand from households and industry. Member states should reduce their gas injection targets at 80% capacity as early as possible during the injection season, 10 percentage points lower than the official EU target, to provide certainty and assurance to market participants. He suggested that countries begin replenishing reserves gradually to avoid a late-summer buying spree that could put pressure on the market, while postponing the deadline for meeting storage targets to December 1st. This is a month later than the deadline stipulated in legislation passed after the Russia-Ukraine conflict.According to the Financial Times, EU Energy Commissioner Jorgensen said that EU member states should reduce their gas injection targets for gas storage facilities to 80% of capacity, 10 percentage points lower than the official EU target.Irans Islamic Revolutionary Guard Corps: The 70th wave of retaliatory strikes against U.S. and Israeli interests in the Gulf region and elsewhere has targeted more than 55 locations.Japanese Prime Minister Sanae Takaichi: Going forward, we will actively pursue strong diplomacy to maximize Japans national interests and create world peace and prosperity.

Gold Price Prediction: XAU/USD recovers to $1,700; negative potential intact

Daniel Rogers

Sep 07, 2022 16:26

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Gold extends Tuesday's retreat from a weekly high and continues to lose ground through the first half of Wednesday's trading session. The XAU/USD falls further below $1,700 for the third consecutive trading day, but stops just above the monthly low reached last Thursday.

 

The persistent purchasing of U.S. dollars remains ongoing and is a crucial element imposing downward pressure on dollar-denominated gold. In fact, the USD Index, which measures the performance of the greenback against a basket of currencies, reaches a new 20-year high in anticipation of a more aggressive Fed policy tightening.

 

In fact, current market pricing shows a probability of greater than 70% that the Fed will increase interest rates by 75 basis points at its upcoming meeting on September 20-21. The bets were confirmed by Tuesday's positive US ISM Services PMI, which caused a sell-off in the US government debt market and pushed the 30-year bond yield to its highest level since 2014.

 

In addition, the yield on the benchmark 10-year US Treasury note rose to levels not observed since June 16. This, in turn, provides extra support for the greenback and also contributes to a shift away from non-yielding gold. However, the existing risk-averse sentiment helps prevent deeper losses for the safe-haven precious metal for the time being.

 

Fears of a recession have been fueled by the likelihood of rapid interest rate increases, as well as the economic headwinds resulting from new COVID-19 restrictions in China and the ongoing conflict in Ukraine. This continues to weigh on investor sentiment, as evidenced by the generally gloomier tone on equities markets, and supports conventional safe-haven investments.

 

The flight to safety aids gold's comeback to the $1,700 round-number mark, but further recovery remains elusive. In the absence of market-moving economic releases from the United States, Fed officials' remarks will play a significant role in determining the USD's price dynamics. This could create chances for short-term trading in the commodity.

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