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On April 2, Claus Vistesen and Melanie Debono, analysts at Pansen Macro, believe that the European Central Bank may choose to remain cautious and keep interest rates unchanged at this months meeting amid increasing economic uncertainty. Data this week showed that annual overall inflation in the euro area continued to slow, close to the ECBs 2% target, and core prices were also falling. But Vistesen and Debono said that risks in energy prices and other areas remain in the coming months. At the same time, Europe is facing a squeeze on economic growth from turmoil and trade tariffs, while having to grapple with the unclear impact of internal stimulus plans on infrastructure and especially defense.On April 2, YiBo Technology announced that the company used its own funds or self-raised funds of RMB 74.398 million to acquire 32.2348% of the shares of the minority shareholders of its holding subsidiary Zhuhai Yishengshun Electronics Co., Ltd. Recently, Zhuhai Yishengshun has completed the industrial and commercial change registration. The company holds 100% of the shares of Zhuhai Yishengshun, and Zhuhai Yishengshun has become a wholly-owned subsidiary of the company.Germanys DAX index fell 1.00% during the day.Futures News on April 2, the latest data from the UAE Fujairah Oil Industry Zone showed that as of the week of March 31, the total inventory of refined oil at the UAE Fujairah Port was 24.341 million barrels, an increase of 4.598 million barrels from a week ago. Among them, light distillate oil inventories increased by 1.298 million barrels to 8.246 million barrels, medium distillate oil inventories increased by 1.058 million barrels to 3.053 million barrels, and heavy residual fuel oil inventories increased by 2.602 million barrels to 13.042 million barrels.On April 2, due to the high uncertainty of the direction of US tariff policy and potential market reactions, the VIX index rose to a more than two-week high of 24.80 on Monday and closed at 22.77 on Tuesday. Mark Spindel, chief investment officer of Potomac River Capital LLC, said: "I think the market is really holding its breath." He expects this "fear index" to rise to the 30 mark. This level usually means that the market has entered a highly risk-averse mode.

Gold Price Prediction: XAU/USD bears at $1,650 on Fed hawkishness and China news

Daniel Rogers

Sep 19, 2022 14:34

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During early Monday morning in Europe, the gold price (XAU/USD) maintains a position close to the intraday low at $1,670. In doing so, metal prices endure the weight of a stronger U.S. dollar amidst a sluggish session caused by Japanese and British vacations. The cause may be related to the Fed's hawkish bets and China-related news stories.

 

US Dollar Index (DXY) reverses a two-day slump while posting intraday gains of 0.18 percent at 109.85 as of press time. Indicators of the U.S. dollar's value versus the six major currencies have recently been buoyed by the University of Michigan's September consumer sentiment report and the market's positive expectations on the Fed's next move. Consequently, the probability of a 75-basis-point (bps) rate hike by the Federal Reserve increased to 80%, while the market's estimates of a one-percentage-point increase in the Fed rate rose to 20% at the latest.

 

US President Biden stated elsewhere, "I'm more positive than I've been in a long time." The national leader also claimed that inflation will be brought under control. On the same line are the covid updates from China, which have unlocked Dalian and Chengdu while observing zero coronavirus cases in Beijing and one, as opposed to zero the day before, outside of Shanghai's quarantine zone. However, US President Biden's willingness to support Taiwan in the event that China assaults Taiwan and hawkish expectations for the Federal Reserve appear to weigh on the steel price ahead of the major monetary policy pronouncements.

 

In addition, the People's Bank of China (PBOC) reduces the 14-day reverse repo rate by 10 basis points to 2.15 percent. "With no maturing reverse repos on Monday, the Chinese central bank injects 12 billion yuan," reports Reuters. The same might have indicated that the dragon nation is not in recovery mode and requires more rate cuts than rate raises, which could have caused the gold price to plummet. The cause is China's position as one of the world's largest gold consumers.

 

In light of this, the S&P 500 Futures post modest losses while mirroring Wall Street's Friday close. Notably, the selling in Japan curbs bond movements in Asia, but yields are robust near the multi-day high due to fears of a recession and hawkish Fed views.

 

Moving forward, a light economic calendar and important market holidays may limit intraday XAU/USD price fluctuations. However, bears are expected to maintain control because to aggressive Fed expectations, which, if dashed, might defy the bearish chart pattern and spark the long-awaited rally.

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