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On August 16th, the Indiana Emergency Operations Center and state officials announced on August 15th that several days of severe storms and flooding had resulted in at least six deaths in the state. Over the past week, continuous torrential rains caused water levels to rise in several rivers across the state, forcing the evacuation of hundreds of residents. Indianapolis Mayor Joe Hogsett stated that the city is experiencing its worst flooding in over 30 years. More than a dozen counties in Indiana have declared a local disaster state. Emergency responders are currently conducting rescue and relief operations, and the National Guard is also involved. Earlier this week, severe storms struck the Midwestern United States, triggering tornadoes, torrential rains, and flash floods. In addition to Indiana, affected states included Illinois, Kentucky, and Ohio, causing power outages for nearly one million customers at one point.On August 16th, according to a report by the U.S. military newspaper Stars and Stripes on the 14th, the U.S. Navy recently discovered an unidentified drone at its largest base in Italy and implemented base-wide security measures. The report stated that the small drone was discovered on the 13th at a support point at the U.S. naval base, prompting security forces to take precautionary measures. Before and after the drones discovery, the U.S. naval base issued a brief shelter-in-place order at a location approximately 13 miles (21 kilometers) from the incident site. It is currently unclear whether this shelter-in-place order was related to the drone discovery, or whether a similar order was issued at the support point.August 16th - At 12:10 PM Beijing time on August 16, 2026, my country successfully launched 24 low-Earth orbit satellites for its satellite internet service using a Long March-12 carrier rocket from the Hainan Commercial Space Launch Site. The satellites successfully entered their predetermined orbits, and the launch mission was a complete success.According to the Jerusalem Post: The Israel Defense Forces killed senior Hezbollah commander Abu Hassan Alaa in a weekend attack on the Deir Zahrani region in southern Lebanon.August 16th - The 2026 Wenchang International Aerospace Forum will be held in Wenchang, Hainan from August 24th to 26th, showcasing the latest achievements of Hainans aerospace industry. The forum aims to seize the new opportunities presented by the industrialization of reusable rockets, gather global aerospace resources, and help strengthen the rocket, satellite, and data chains, as well as the "aerospace+" industry, building a comprehensive and multi-layered aerospace industry ecosystem. Hainan will fully promote the implementation of key projects, accelerate the formation of high-density, high-reliability, and low-cost commercial launch capabilities, and efficiently support the "hundreds of rockets, thousands of satellites" mission.

The XAU/USD pair attempts to regain $1,730 prior to Fed Chair Powell's address

Alina Haynes

Sep 08, 2022 16:58

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Gold price (XAU/USD) gains bids to reestablish intraday high at $1,718 as the US dollar retreats ahead of Thursday's big events. In doing so, the yellow metal extends yesterday's recovery from the one-week low amid weaker yields and a mixed risk profile.

 

US 10-year Treasury yields extend Wednesday's fall from the highest levels since mid-June to 3.23%, which weighs on the US Dollar Index (DXY), which retreats to 109.50, extending yesterday's losses from the 20-year high.

 

The recent decline in yields may be attributable to the market's rush into bonds prior to the crucial European Central Bank (ECB) Monetary Policy Meeting and Fed Chair Jerome Powell's speech. However, rumors about Japan's probable involvement to preserve the home currency via the bond market appear to have depressed yields.

 

Due to Beijing's role as one of the world's largest gold buyers, contradictory news from China should have also contributed to the XAU/USD's comeback.

 

Three persons with knowledge of the situation were cited by Reuters when they reported encouraging news for China's property sector. Reuters said that "Zhengzhou pledged to restart all halted housing projects within 30 days by utilizing special financing, requiring developers to refund misused funds, and encouraging certain real estate businesses to file for bankruptcy."

 

Nonetheless, the risk-negative news regarding covid and Taiwan appeared to impose downward pressure on metal prices. The South China Morning Post (SCMP) previously reported, "Shenzhen lowers Hong Kong visitors' admission quota." Reuters' report that Taiwan and the United States are preparing for closer ties further dampens the mood.

 

While reflecting market sentiment, S&P 500 Futures post modest gains, whilst Asia-Pacific equities remain divided.

 

In conclusion, the ECB's 75 bps rate hike can limit a short-term decline in the XAU/USD before a new decline, if Powell sounds hawkish. As the ECB's ability to tighten monetary policy is restricted compared to the Fed's, the gold price is likely to remain in the bears' sights. Also, economic concerns originating from Europe are not ruled out, giving gold bears cause for optimism.