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On January 31, Russian Deputy Foreign Minister Grushko stated that the best guarantee for Ukraines security is a concrete guarantee of Russias security, a guarantee that no one in the West has offered. He emphasized, "If we believe that Ukrainian territory will not be used as a bridgehead threatening Russias security, then Ukraines security will also be guaranteed." The Russian Foreign Ministry previously stated that any scenario involving NATO member states deploying troops in Ukraine is absolutely unacceptable to Russia and could lead to a sharp escalation of the situation. The Russian Foreign Ministry also stated that statements from Britain and other European countries regarding the possible deployment of NATO troops in Ukraine are incitement to continue the conflict.January 31 – With the House of Representatives in recess and unable to consider the appropriations bill, the U.S. federal government entered a technical, partial shutdown at midnight local time on January 31. Analysts point out that although the shutdown is expected to be short-lived, it once again highlights the structural predicament of U.S. fiscal politics. In recent years, temporary funding, short-term extensions, and marginal shutdowns have become the norm in congressional budget battles, with government operations frequently hampered by political disagreements. Currently, the market generally believes that the direct impact of this technical shutdown on financial markets and economic operations is limited, but if subsequent congressional negotiations are again stalled, the risk of a prolonged shutdown and a wider impact cannot be ruled out.January 31st - The US government officially began a partial shutdown early this morning local time. This followed the Senates passage of a spending bill to fund most federal government departments, which was then submitted to the House of Representatives for consideration. However, because House members were not in Washington and would not return until Monday (February 2nd), the Senate vote could not prevent a partial government shutdown.January 31st - According to the UKs Daily Telegraph, British Prime Minister Keir Starmer responded to US President Trumps remarks on Sino-British cooperation in Shanghai on the 30th, stating that ignoring China would be "unwise." "It would be unwise to simply say we should ignore it. You know, French President Macron has already visited (China) and had exchanges, and German Chancellor Merz is also coming to exchange views," Starmer said. "It would not be in our national interest for Britain to be the only country refusing to engage (with China)." Starmer added, "In the past 24 hours, the opening of market access has been warmly welcomed by the business community. They have reported a change in the atmosphere and a significant increase in willingness to cooperate. This is good for our economy."On January 31st, China Merchants Securities, in its latest research report, also pointed out that its team recently surveyed liquor distribution channels in Henan, Anhui, Sichuan, and other regions. Overall demand is still declining (double-digit decline), but this is in line with previous expectations. Looking at different scenarios, business banquets are mainly small-scale events, mid-to-high-end dining remains sluggish, and gift-giving demand has partially rebounded. There is a clear differentiation among brands, with Moutai showing excellent sales performance due to pre-emptive stockpiling for the Spring Festival, while other brands are under pressure.

Gold is Close to Falling Below $1,700 as Expectations of a Fed Rate Hike Soar

Charlie Brooks

Sep 07, 2022 11:05

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On Wednesday, spot gold prices temporarily fell below $1,700 as indicators of strength in the U.S. economy fuelled hopes that the Federal Reserve will continue hiking interest rates rapidly.


Spot gold dropped as much as 0.5% to $1,699.97, while gold futures declined 0.1% to $1,711.0 as of 19:18 ET (11:29 GMT). Tuesday saw declines of 0.5% and 0.7%, respectively, for both assets, which were hovering at late-July lows.


Gold saw fresh pressure from the strength of the U.S. dollar, which soared on Tuesday following the release of data showing that the U.S. service sector continued to expand in August. August's ISM non-manufacturing purchasing managers index was 56.9, exceeding estimates of 55.1 and the previous month's reading of 56.7.


The result, combined with strong signals from the labor market last week, implies that the U.S. economy is regaining some vigor, giving the Federal Reserve greater room to sharply hike interest rates.


The dollar index rose 0.4% to 110.25, a level not seen in over two decades, while dollar index futures also rose. Yields on 10-year U.S. Treasuries reached their highest level in two months, while yields on shorter-term Treasuries rose.


In September, investors anticipate a 72% chance that the Fed will raise interest rates by 75 basis points.


As the Fed began to raise interest rates this year, the price of gold has declined substantially from its peaks in 2022. In the face of a likely global economic slowdown, rising demand for safe-haven assets has had minimal impact on gold prices. Other precious metals have experienced comparable declines this year.


Among industrial metals, copper prices remained unchanged following significant advances earlier in the week.


Copper futures climbed about 2% earlier as China, the world's top importer of the red metal, unveiled additional economic development boosting measures. However, the forecast for copper remains restricted by slow global economic activity.


China's industrial sector has contracted for two consecutive months, and Beijing's zero-COVID policy will continue to create headwinds.

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