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On January 24, local time, an Iranian official stated that the Iranian military is prepared to respond to any possible actions by the United States. The unnamed official said, "The Iranian military is prepared for the worst-case scenario, but we hope that the troop increase will not escalate into actual confrontation." He added, "We consider any potential attack by the United States to be an existential threat to Iran." The official also warned the United States and Israel against such risky actions, stating, "The collapse of Iran would directly lead to the collapse of the region, including Israel." The official added, "Our situation is far better than during the 12-Day War; there is no longer any so-called surprise attack."On January 24th, it was reported that on December 24th of last year, four departments, including the Beijing Municipal Commission of Housing and Urban-Rural Development, issued the "Notice on Further Optimizing and Adjusting Relevant Policies of Beijing Real Estate," which involved adjustments to purchase restrictions and credit optimization. Overall, since the implementation of the new policy a month ago, transaction volume has been steadily increasing. Data from Centaline Property shows that since the release of the notice, the average daily number of new home sales contracts has increased by 44.6% month-on-month, with improved housing projects outside the Fifth Ring Road performing particularly well. In the secondary market, after the new policy, the average daily number of viewings at real estate agencies has increased by more than 20% compared to normal, and the average daily transaction volume of secondary homes has exceeded 500 units.January 24th - The Fourth Session of the 14th Beijing Municipal Committee of the Chinese Peoples Political Consultative Conference (CPPCC) solemnly opened at the Beijing Conference Center at 9:00 AM today (January 24th). The opening session will review and adopt the "Agenda of the Fourth Session of the 14th Beijing Municipal Committee of the CPPCC," hear the "Work Report of the Standing Committee of the 14th Beijing Municipal Committee of the CPPCC," and hear the "Report of the Standing Committee of the Beijing Municipal Committee of the CPPCC on the Work of Proposals Since the Third Session of the 14th CPPCC."DownDetector, a network monitoring website, reports user complaints that social media platform “X” is experiencing issues.January 24th - The market is widely focused on when the window for reserve requirement ratio (RRR) and interest rate cuts will open. Ming Ming, chief economist at CITIC Securities, stated that based on past experience, a reduction in the relending rate opens up corresponding room for overall interest rate cuts. With a large number of fixed deposits maturing in the first quarter, the pressure on bank interest rate spreads is easing, and the timing of a policy rate cut is expected in the second quarter. "A RRR cut is expected to be implemented in the first quarter, but a comprehensive interest rate cut still needs to wait," analyzed a research report from Galaxy Securities. The report suggests that with fiscal policy taking the lead and monetary policy actively cooperating with fiscal policy, a 50 basis point RRR cut is likely to be implemented. A comprehensive interest rate cut still needs to wait for the right opportunity; it is expected that there will be one to two interest rate cuts throughout the year, totaling a reduction of 10 to 20 basis points in the policy rate, thereby guiding the LPR (Loan Prime Rate) downward, which will then be transmitted to further reduce loan and deposit rates.

Gold Price Prediction: XAU/USD treads water below $1,700 due to pre-Fed jitters

Alina Haynes

Sep 20, 2022 14:34

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During Tuesday's early European morning, the gold price (XAU/USD) trades near $1,676 as it attempts to preserve Friday's rebound from the two-year low. In doing so, the bullion reflects the market's uneasiness preceding significant central bank statements, as well as trade and geopolitical concerns emerging from Russia and China.

 

Fears that the US dollar has already priced in the Fed's 0.75 percentage point rate hike and that there is no more room for the greenback to appreciate have recently impacted on the US currency. There may be a connection between the dismal US housing data and inflationary expectations and the anxieties.

 

The US NAHB Housing Market Index decreased for the ninth straight month to 46, compared to 48 anticipated and 49 previously. In spite of this, US inflation expectations, as measured by the 10-year breakeven inflation rate according to the St. Louis Federal Reserve (FRED) statistics, fell for the third consecutive day to a two-month low near 2.34 percent by the end of the North American trading session on Monday. Moreover, according to FRED statistics, the 5-year breakeven inflation rate plummeted to its lowest level since September 2021, at 2.44 percent. Concerns were raised regarding the market's unexpected reaction to the Fed's hawkish wagers.

 

On the other hand, the European Commission's willingness to use emergency power to prevent a supply crisis seems to have combined with hawkish statements from European Central Bank (ECB) policymakers to support the XAU/USD upward via a weaker USD. In addition, the relative quiet surrounding the US-China conflict over Taiwan and China's covid unlocks is beneficial for metal prices.

 

Nonetheless, multi-day high yields and general forecasts of increased interest rates in the face of economic slowdown worries appear to put the gold price under pressure. In addition, the news that the holdings of the SPDR Gold Trust, the largest gold-backed exchange-traded fund in the world, fell to 30,799,131 ounces on Monday, the lowest level since March 2020, adds to the negative catalysts for XAU/USD traders.

 

However, the second-tier US housing data may provide timely guidance prior to the FOMC meeting on Wednesday. Given the Fed's heightened expectations, any disappointment will not be taken lightly and may offer the XAU/USD with the much-needed boost from its yearly low.


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