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On January 9th, a research report from CITIC Securities stated that the Hang Seng Composite Index will undergo a new round of review on February 13th, with the adjustments officially taking effect on March 9th. The Hong Kong Stock Connect will also be adjusted accordingly. We expect 38 stocks to be included in the Hong Kong Stock Connect, with information technology, healthcare, materials, and consumer discretionary sectors having higher market capitalization weightings. A-shares and H-shares do not need to wait for periodic adjustments; they can be directly included in the Hong Kong Stock Connect after a price stabilization period. Therefore, one stock may have already been included before March 9th. We also suggest investors pay attention to timing opportunities between the Hang Seng Composite Index announcement date and the Hong Kong Stock Connect effective date. Furthermore, since some arbitrage funds may position themselves before the Hong Kong Stock Connect takes effect, while passive funds often adjust their positions on the trading day before the effective date, some less liquid stocks may experience a surge in trading volume at the end of the day.Market news: South Korean President Lee Jae-myung will visit Japan from January 13 to 14.US Treasury Secretary Bessenter: We will not force institutional investors to withdraw from real estate investments.According to the Wall Street Journal, Nvidia (NVDA.O) has hired Google veteran Alison Wagonfeld as its first chief marketing officer.On January 9th, German Chancellor Merz stated on January 8th that the proposed formation of a "multinational force" to be deployed to Ukraine after a ceasefire between Russia and Ukraine would not be feasible without Russias consent. Merz made these remarks after attending a closed-door meeting of the Christian Social Union (CSU) in Bavaria, southern Germany. He noted that the leaders of Germany, France, and the United Kingdom agreed in December to sign a memorandum of understanding with Ukraine regarding the deployment of troops, but this involved security guarantees for Ukraine after a ceasefire agreement. Merz emphasized that a ceasefire must be achieved first, followed by security guarantees for Ukraine and a long-term agreement with Russia; this order must be followed. All of the above would be impossible without Russias consent.

Gold Treads Water Pending Additional Fed Hints

Haiden Holmes

Feb 21, 2023 11:27

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Gold prices hovered slightly around six-week lows on Tuesday, as traders waited for more monetary policy clues from the Federal Reserve's February meeting minutes before placing large wagers.


This week, markets were also anticipating a spate of Fed speakers, as hot U.S. inflation and a robust labor market put the central bank's policies in the spotlight.


Although U.S. markets were closed on Monday for a holiday, trading on gold and other metals has been limited so far this week. The continued demand for the dollar in Asian and European trade capped the price of metal.


At 20:32 ET, spot gold was unchanged at $1,841.59 per ounce, and gold futures were slightly changed at $1,850.25 per ounce (01:32 GMT). Both assets have suffered three consecutive weeks of losses.


Hotter-than-expected The recent gain in gold prices was abruptly halted by the U.S. inflation data as investors sharply reviewed their expectations for interest rate hikes this year.


The Fed has sufficient motivation to continue to raise interest rates due to persistent inflation and indicators of a robust labor market. Wednesday's release of the minutes from the Fed's February meeting is expected to confirm the central bank's hawkish position.


An increase in U.S. Treasury yields and the value of the dollar weighted hard on non-yielding assets such as gold and other metals. With U.S. yields and interest rates expected to grow further in tandem, the near-term picture for gold remained bleak, as Fed officials cautioned that U.S. interest rates could surpass 6% this year.


Gold and other precious metals could profit from safe-haven buying later in the year, particularly if slower economic growth pushes the Federal Reserve to reverse its hawkish strategy.


On Tuesday, prices for other precious metals were modest. Futures for platinum increased 0.2% to $929.40 per ounce, while futures for silver decreased 0.2% to $21.780 per ounce.


Copper prices declined marginally on Tuesday, following a 1.5% increase in the previous session, despite persistent optimism on China's economic rebound.


Futures for high-grade copper dipped 0.1% to $4.1730 per pound.


Monday's decision by the People's Bank to maintain historically low mortgage rates bolstered optimism for a Chinese economic revival. Although the action was widely anticipated, it showed that the administration intended to maintain accommodating policies to stimulate economic growth.