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The Iranian Foreign Minister discussed the protests in Iran with U.S. Special Envoy Witkov.January 12th - JPMorgan Chases securities trading division stated that the Trump administrations latest challenges to the Federal Reserves independence pose a threat to the US stock market, at least in the short term. News of a potential criminal investigation into the Fed impacted US markets Sunday night, causing stock index futures and the dollar to fall, with funds flowing into safe-haven assets such as gold. Andrew Taylor, JPMorgan Chases global head of market intelligence, said, "While macroeconomic and corporate fundamentals support a tactical bullish stance, the risks to the Feds independence are creating downward pressure on the market, so we remain cautious in the very short term. The risks surrounding the Feds independence could push US markets to underperform in the short term."On January 12th, it was reported that Bank of Communications received approval to acquire and restructure one of its rural banks, becoming the first state-owned bank to convert a rural bank into a branch bank in the new year, and the tenth such conversion since last year. Since 2025, in addition to Bank of Communications, Industrial and Commercial Bank of China and Agricultural Bank of China have also begun converting their rural banks into branches. Many industry insiders interviewed believe that with the Central Economic Work Conference setting the tone for "reducing the number and improving the quality" of small and medium-sized financial institutions, the reform and risk mitigation of small and medium-sized banks will accelerate this year, with mergers and acquisitions remaining the mainstream model. Data shows that more than 450 small and medium-sized banks will exit the market in 2025, of which more than 280 are rural banks, with Inner Mongolia, Shandong, and Hubei experiencing the largest reductions.On January 12th, Jane Foley, head of foreign exchange strategy at Rabobank, stated in a report that the US dollar is expected to face greater volatility this year as political pressure on the Federal Reserve rises. Markets are concerned that the Fed may lose its independence due to government demands for interest rate cuts and pressure on current Chairman Powell. However, Foley pointed out that some argue that with inflation remaining high, other FOMC members could provide a check on a Fed chairman who favors rate cuts. Foley stated that uncertainty surrounding the Feds future credibility may put downward pressure on the dollar, "but not to the point of triggering an out-of-control decline."Mexican President Simbaum: Had a “good conversation” with US President Trump.

Price of Gold Fundamental Daily Forecast - Steady after Fed Minutes Show No Unexpected Developments

Daniel Rogers

May 27, 2022 09:15

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Gold futures are marginally higher early on Thursday compared to the previous session's closing price. Prices were under pressure before to the release of the Federal Reserve's most recent meeting minutes, but steadied by market close following the Fed's announcement.

 

The price movement indicates that gold dealers anticipated the Fed's decision and are now prepared to study economic data that may convince officials to rethink their first response to rising inflation. One answer may be optimistic while the other may be negative. However, it might be months before we determine whether the Fed's attempts to tighten monetary policy are effective, which could result in a trading range for gold prices.

Fed Minutes Suggest Central Bank Will Not Become More Aggressive

After the minutes of the Federal Reserve's monetary policy meeting on May 3-4 indicated that the central bank would raise interest rates by 50 basis points in June and July to combat inflation, which they agreed had become a major threat to the economy's performance, gold futures recouped a portion of their dollar-driven losses late Wednesday.

 

The announcement may have been favorable for gold since traders no longer needed to fear a 75-basis-point rate rise that they had feared for the past two weeks. In addition, it appeared from the minutes that the Fed would wait until its September meeting before making any big revisions.

 

Members of the Federal Open Market Committee (FOMC) concur that the U.S. economy is robust enough to absorb two 50-basis point increases in interest rates.

Daily Forecast

Gold traders may now focus on the movement of U.S. Treasury rates and the U.S. Dollar, as the minutes have been completed. The two markets that ultimately decide gold price direction.

 

Inflation, economic growth, and employment statistics will act as yield-moving triggers during the next two months. To review the Fed's objectives. Policymakers seek to boost interest rates sufficiently to reduce inflation while preserving economic growth and a robust job market.

 

From now until September, when the Fed evaluates the impact of the June and July rate rises, U.S. economic reports are expected to influence gold prices.

 

As early as Thursday, when the U.S. Preliminary GDP and Weekly Unemployment Claims data are out, gold dealers will be able to observe this in action.

 

The GDP numbers from the first quarter are outdated, however the initial claims data are current. The market anticipates a reading of 217K. Anything greater will be cause for alarm, but will not derail Fed goals. However, it may prompt some of the weaker gold bears to reduce their short holdings.

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