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On December 17th, Andrew Phillips, Managing Director of V12 Retail Finance Limited, stated in a report that the Bank of England is expected to cut interest rates on Thursday due to lower-than-expected UK inflation data. The UKs annual inflation rate fell to 3.2% in November, below the 3.5% predicted by economists in a Wall Street Journal survey. LSEG data shows that the market expects a 99% probability of a Bank of England rate cut this week.Chairman of the Board of Warner Bros. Discovery Inc. (WBD.O): Shareholder voting will be held in the spring or early summer.On December 17th, James Machett, an analyst at SEI, stated in a report that economic data does not support a change in the European Central Banks (ECB) policy stance. "Given that inflation is near its target level (although still slightly above it) and economic growth remains stable (though not outstanding), we see no reason for the ECB to adjust its policy stance in the near term," Machett said. He noted that after eight consecutive rate cuts between June 2024 and June 2025, the ECB is highly likely to keep rates unchanged this week pending further data. The ECB will announce its interest rate decision on Thursday.On December 17th, Pansen Macro analyst Melanie Debono noted in a report that despite lower-than-expected overall inflation in November, the European Central Bank (ECB) is expected to keep interest rates unchanged this week. The Eurozones overall inflation rate for November was revised to 2.1%, lower than the initial estimate of 2.2% and market consensus. Debono stated that inflation is expected to rise slightly in December, with year-end inflation exceeding expectations, which could prompt the ECB to raise its inflation forecast for next year. The average inflation rate for 2026 is projected to be 1.9%, higher than the ECBs current forecast. "This should be sufficient to prevent the ECB from further easing monetary policy in the new year, especially given our expected acceleration in GDP growth," Debono said.On December 17th, MUFG analyst Derek Halpenny stated in a report that the pound faces further downside risk due to the Bank of Englands longer rate-cutting cycle compared to most other G-10 central banks. He said that Wednesdays weaker-than-expected UK inflation data should dispel any doubts about a rate cut by the Bank of England on Thursday. He anticipates that inflation expectations may decline further in February, at which point the Bank of England may cut rates again. "The market hasnt fully priced in this expectation yet, so we believe theres still room for short-term yields to fall, which will put further downward pressure on the pound."

Gold Prices Approach 16-Month Low Before Rebounding to $1,700

Skylar Williams

Jul 22, 2022 11:29

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During the "Fed-vacuum" week, gold had a larger-than-expected price movement, although it was a decrease rather than a rise.


On January 31, gold futures for August delivery on New York's Comex reached a low of $1,676.80, less than a week before the central bank's announcement about a rate hike in July. It ended the day at $1713.20, an increase of 13.2 points, or 0.8%.


According to dealers, the spot price of bullion, which more precisely represents gold's pricing and demand dynamics than Comex futures, touched a 16-month low of $1,680.96.


Gold bulls have been unable to push the market far higher from its 11-month low of $1,695 on Comex last week, despite Fed officials respecting the customary 10-day speech prohibition before the rate decision on July 27.


The restart of gold's drop on Thursday could not be traced to a single cause. The dollar, which often influences the direction of gold by moving in the opposite way, also sank as the European Central Bank joined other central banks in raising interest rates to battle inflation rather than to prevent a recession.


On Thursday, the Dollar Index, which measures the dollar to six other currencies, hovered below 107 after topping 109 for the first time since December 2002 due to anticipation of rapid Federal Reserve rate hikes.


Others, though, saw the recovery to $1,700 as proof of gold's endurance.


Craig Erlam, an analyst at the online trading platform OANDA, said, "This session has been highly volatile, and gold seems to have recovered in popularity." "The shift may be caused by a hawkish ECB, but the gain in gold much surpasses the decrease in the dollar. We seem to be seeing the inverse of the price movement from late last week. Is the market for gold recovery active?"

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