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On September 18th, NBC reported, citing seven current and former U.S. and Western officials, that the Pentagon is assessing a significant reduction in U.S. military deployments in Europe, potentially withdrawing approximately 25,000 troops, roughly one-third of the current U.S. troop presence in the region. The proposed reduction could even extend to a maximum of 40,000 troops. If implemented, this would be the largest adjustment to the U.S. military presence in Europe since the end of the Cold War. Currently, the U.S. has approximately 80,000 troops stationed in Europe, primarily in Germany, Italy, and Spain. The report states that the Pentagon launched a six-month review of its European troop presence in June. European Command Commander Alex Greenkiewicz is expected to submit the assessment to Defense Secretary Hergsays soon, with plans potentially involving reductions in air and naval personnel, ground troops, or adjustments to troop deployment locations. Pentagon officials stated that the review aims to ensure U.S. military deployments align with the "America First" strategy. Some European countries and U.S. lawmakers have expressed concern about the large-scale withdrawal, arguing that it could weaken NATOs deterrent capabilities. Supporters, however, believe the U.S. should reallocate its overseas military resources, assigning more regional defense responsibilities to Europe. The relevant plan has not yet been finalized, and any withdrawal is expected to proceed after the final recommendation is submitted to the president for approval.According to NBC News, the Pentagon is considering withdrawing nearly a third of its U.S. troops from Europe.OpenAI launches a new AI model for law firms.The Dow Jones Industrial Average rose 316.14 points, or 0.61%, to close at 51,778.04 on Thursday, September 17; the S&P 500 rose 85.91 points, or 1.14%, to close at 7,637.72; and the Nasdaq Composite rose 439.87 points, or 1.69%, to close at 26,418.30.On September 18, voting began in the Kamchatka Krai and Chukotka Autonomous Oblast for the election of Russias ninth State Duma (lower house of parliament) at 8:00 a.m. local time. This is the first nationwide parliamentary election held in Russia since the special military operation against Ukraine in 2022.

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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