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Oil prices extended their gains at the open on Monday, hitting a more than three-month high as the market expected broader U.S. sanctions to affect Russian crude supplies. Traders and analysts said Russias oil exports will be severely affected by the new sanctions, forcing major buyers to source more oil from the Middle East, Africa and the Americas, which will push up prices and transportation costs. "The latest round of sanctions against Russian oil companies and a large number of tankers will have a significant impact, especially on India," said Harry Chilingirian, head of research at Onyx Capital Group.Both U.S. and Brent crude oil prices expanded their gains to 2% in early trading as the impact of U.S. energy sanctions on Russia last week continued.On January 13, it was reported that the UK is exploring the use of nuclear energy for the construction of artificial intelligence data centers. The first area will be located in Culham, the home of the UK Atomic Energy Agency. The British government will set up an energy committee composed of government and private officials, which will explore the use of small modular reactors that rely on nuclear fission technology to power data centers. Vantage Data Center said that as part of the plan, it will invest more than 12 billion pounds (14.6 billion US dollars) in data centers across the UK. Another data center company, Nscale, said it will invest $2.5 billion in the next three years. The Labour Party, led by Starmer, has put artificial intelligence at the heart of its economic agenda, but has been slow to roll out related policies and has been criticized for confusing early information.U.S. stock index futures opened slightly lower on Monday, with S&P 500 futures and Nasdaq futures both falling 0.1%.On January 13, ABP, Europes largest pension fund, sold all of its 571 million euros ($585 million) in Tesla in the third quarter, partly because it disagreed with Musks compensation plan. An ABP spokesman said on Sunday that Musks compensation plan was "problematic." The fund also considered costs, returns and responsible investment requirements when deciding to sell its shares. The Dutch Daily Financial News first reported the news, which also listed poor working conditions as one of the reasons why ABP abandoned Tesla. Last month, Musks record Tesla compensation plan was again rejected by a Delaware judge. The stock option plan was originally worth $2.6 billion and soared to $56 billion when the judge rejected the plan. In June of this year, ABP voted against the compensation plan, calling it "controversial and abnormally high."

As US economic data is reviewed, XAU/USD slips off $1,740 support-turned-resistance

Daniel Rogers

Aug 30, 2022 11:47

 截屏2022-08-04 下午5.12.51_1024x576.png

 

During Tuesday's Asian session, the gold price (XAU/USD) retests its intraday low near $1,736 after a failed rebound off the one-month low. In doing so, metal prices take cues from the most recent comeback of the U.S. dollar from its intraday low and justify the challenges to market mood originating from China and the central bankers' front.

 

The US Dollar Index (DXY) rebounded from the daily low to 108.81 after reversing from a new 19-year high the day before. In doing so, the dollar's index against the six main currencies appears to validate the market's fears of higher interest rates despite the imminent economic downturn, as Fed Chair Jerome Powell had previously suggested.

 

It is important to note that rumors of an escalation in Sino-American tensions over Taiwan also impose downward pressure on the XAU/USD exchange rate, primarily since Beijing is one of the world's largest commodities consumers. The news further strengthens the dollar's appeal as a safe haven. Politico has reported that the Biden administration will ask Congress to authorize a $1.1 billion arms sale to Taiwan. Prior to it, the movement of US boats in the Taiwan Strait and the visits of American diplomats to Taipei provoked China.

 

In contrast, the most recent news from Bloomberg regarding the Eurozone's ability to combat the energy issue appears to challenge the XAU/USD bearish. "The European Union is on track to fulfill its gas storage filling goal two months ahead of schedule as the EU prepares for a harsh winter with Russia limiting supplies and surging energy prices ravaging the continent," Bloomberg reported.

 

Monday saw the consolidation of recent market movements amid a light economic calendar and contradictory Fed commentary. In spite of this, the Dallas Fed Manufacturing Business Index increased to -12.9 from -20.2, as anticipated, and -22.6 previously. Neel Kashkari, president of the Minneapolis Federal Reserve Bank, claimed that people now comprehend how serious we are about bringing inflation back to 2%.

 

Following a two-day uptrend to reestablish the monthly high, the 10-year US Treasury yields fall to 3.10% amidst these plays. With this, intraday gains for S&P 500 Futures are reduced.

 

Moving forward, the August US Consumer Confidence and statements from Fed speakers are highlighted as the primary drivers to watch for additional impetus. In his Jackson Hole speech, Fed Chair Powell voiced concern over economic slowdown and labor market pressures. Consequently, Friday's US employment report will garner a great deal of attention.