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On August 26th, ING strategists Padhraic Garvey and Michiel Tukker stated that market discussions surrounding the U.S. Treasurys decision to double the size of its long-term Treasury repurchase program continue to intensify, but with the Jackson Hole Economic Symposium approaching, market focus will gradually shift to short-term bonds. In a report, the two strategists noted, "Treasury Secretary Bessenter continues to dominate, or rather attempts to dominate, the long-term bond market, while Federal Reserve Chairman Warsh may also want to play a similar role in the short-term bond market, although he is currently choosing to remain low-key." The strategists indicated that Warsh will have the opportunity to further elaborate on his views at the Jackson Hole symposium on Friday.On August 26, 2026, Wang Yi, member of the Political Bureau of the CPC Central Committee and Foreign Minister, met with Uzbekistans Chief of Staff, Mirziyoyeva, in Beijing. Wang Yi stated that China has always been a trustworthy and reliable partner of Uzbekistan, and will, as always, support Uzbekistan in safeguarding its national sovereignty, security, and development interests, in pursuing a development path suited to its national conditions, and in President Mirziyoyevas policies and initiatives to build a "New Uzbekistan." He expressed confidence that Uzbekistan will continue to provide firm support on issues concerning Chinas core interests. China is willing to work with Uzbekistan, guided by the important consensus reached by the two heads of state, to strengthen high-level exchanges, accelerate the construction of landmark projects such as the China-Kyrgyzstan-Uzbekistan railway, promote mutually beneficial cooperation in trade and investment, energy and minerals, culture and people-to-people exchanges, and local cooperation, expand cooperation in emerging fields such as artificial intelligence and renewable energy, and strengthen multilateral coordination to write a new chapter in China-Uzbekistan friendly cooperation.The UK energy regulator OFGEM says the abolition of VAT will benefit customers currently on flat-rate packages, as suppliers will automatically apply discounts.The UKs energy regulator OFGEM announced that from October, the price cap will increase by £60 per year (or £5 per month) to £1,723 for households using both electricity and gas.The UKs energy regulator OFGEM has stated in this update that the governments decision to abolish VAT on all household electricity bills has been reflected in the decision.

Gold prices show upside potential, but bulls remain cautious

Oct 26, 2021 10:57

On October 1, gold prices fell slightly from near this week's high. Earlier, the fall in US Treasury yields triggered by risk aversion saved the gold bulls. The price of gold rebounded from a seven-week low and returned to above $1750. The current hourly chart of gold shows that there is still hope for the price of gold to rise further, but the stagnation of the dollar has put pressure on gold. The market remains cautious until the US personal consumption expenditure data is released in the evening.



Gold prices rebound from 7-week lows


After hitting a new one-week high on Thursday, the price of gold fell on Friday, but it was still trading above US$1750. Signs of a rebound in the dollar's decline have put pressure on gold prices. Data released on Thursday showed that the US gross domestic product (GDP) in the second quarter increased by 6.7% year-on-year, slightly higher than market expectations of 6.6%. The optimistic data supports the US dollar.

On Friday, Chicago Fed President Evans called for patience with inflation and believed that in order to push the inflation level back to 2%. The current level of ultra-low interest rates is still necessary. A majority of the U.S. Senate voted on Thursday that the government will continue to operate in full at the beginning of the new fiscal year.

With the postponement of voting for the US infrastructure bill, rising inflation concerns, and concerns about global economic growth, the market remains risk-averse. Therefore, while the dollar is trying to resume its upward trend, US Treasury bonds are experiencing a recovery in safe-haven capital flows, which has seriously dragged down the yield of the entire curve.

Despite the rebound in gold prices, the Fed's expected interest rate cuts and subsequent interest rate hikes are heating up, which may keep the bulls nervous. At the same time, the upward revision of the final valuation of US GDP in the second quarter and the expectation of the Fed's tightening policy continue to weaken the recovery of gold.

The market’s attention is now turning to the US Personal Consumption Expenditure (PCE), ISM Manufacturing PMI (ISM Manufacturing PMI) and the revised Michigan Consumer Sentiment Index (Michigan Consumer Sentiment).

Gold price technical analysis


From a short-term technical point of view, the hourly chart of gold prices confirms the reversal of the decline, which shows that the price of gold is still rebounding towards the goal of $1,797.

However, for people who are bullish on gold, this may be a rough journey, as investors remain cautious until the arrival of intraday inflation data. If the price of gold can effectively break Thursday's high of $1764, it may increase interest in renewed bullishness. The relative strength index (RSI) is stable above the midline, suggesting that the price of gold still has room for further upside.

On the downside, the lower support level first looks at the 21-day moving average at $1747. Once broken, the low of the previous week's $1738 level will provide further support.


(Spot gold daily chart)

GMT+8 At 15:30 on October 1, spot gold was quoted at $1,753.252 per ounce.

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