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June 10 - Goldman Sachs Asset Management strategist Tim Urbanowicz stated that while the recent surge in overall and core inflation is significant and poses headwinds to the economy and cyclical sectors, the driving force from the AI investment cycle, the potential benefits of the Beauty Act, and the lagged effects of the Federal Reserves rate cuts continue to provide strong support.June 10th - US May CPI data showed inflation surging to a three-year high, but a moderate rise in core prices eased Wall Streets concerns about interest rate hikes. Todays CPI data and tomorrows PPI index are expected to influence the Federal Reserves policy stance, which will be announced at the Fed meeting chaired by Warsh for the first time in a week. According to CME FedWatch, prior to the release of the CPI inflation data, the market had already priced in a 70% probability of a Fed rate hike by the end of 2026. However, the market believes that a rate hike at next weeks meeting is highly unlikely, with only a 13% probability of a rate hike at the July meeting. The short-term focus is on whether the Fed will clearly shift from an easing stance to a neutral or tightening stance at the upcoming meeting. This weeks CPI and PPI inflation data, as well as the progress of US-Iran negotiations, may influence the balance between neutral and tightening.Fed mouthpiece Nick Timiraos: May core CPI rose 0.21% month-over-month, very close to expectations, pushing the 12-month core CPI annual rate to 2.9%.German Chancellor Merz: The Future Combat Air System (FCAS) project will continue to be pursued as a European system. Discussions on the project will take place in July.German Chancellor Merz: French President Macron and I have agreed not to proceed with the development of the Joint Fighter Jet.

Oil Prices Rise As The IEA Forecasts A Rebound in Chinese Demand

Haiden Holmes

Feb 06, 2023 10:45

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Gold prices were subdued on Monday following their worst week in seven months, with attention now shifting to a talk with Federal Reserve Chair Jerome Powell after stronger-than-anticipated U.S. job statistics stoked fears of additional monetary tightening.


The price of gold fell by 2.5% on Friday and more than 3% in the previous week after U.S. employment data for January was significantly stronger than anticipated. The readings sparked concerns that the Fed has sufficient economic room to continue raising interest rates, resulting in a dollar and Treasury yields recovery rally.


This dragged on most metal prices, with gold- which had a good run-up to Friday’s data- suffering substantial losses. For the first time in nearly a month, the price of gold went below the important $1,900 support level.


Spot gold was steady at $1,864.93 an ounce, while gold futures expiring in April slid 0.2% to $1,876.40 an ounce by 18:50 ET (23:50 GMT) (23:50 GMT).


Tuesday's discussion with Chairman Jerome Powell at the Economic Club of Washington, D.C. will provide additional economic guidance. Any remarks on the current employment numbers and inflation trajectory will be attentively monitored.


As anticipated, the Fed hiked interest rates last week and hinted that it will continue to do so in the near future. This sparked greater bets that the central bank could swing away from its hawkish posture by the year-end.


However, these wagers were quickly reversed by Friday's strong employment figures, which also fueled fears that U.S. inflation may remain rising for a longer period of time than anticipated.


Additionally, other precious metals declined on Friday and were trading in a range on Monday. After plunging below $1000 per ounce, platinum futures climbed 0.2%, while silver futures resumed losses, sliding 0.4% to $22.340 per ounce.


Copper prices recovered marginally this week after falling nearly 4% the previous week, as markets balanced a potential demand resurgence in China against rising fears of a worldwide recession. Rising interest rates and soaring inflation are projected to severely weigh on the global economy this year.


High-grade copper futures increased 0.4% to $4.0475 a pound.


This week, the focus is on additional economic indicators from the world's largest copper importer, China, as well as social upheaval in the world's second-largest copper exporter, Peru.

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