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On May 15th, six entities, including the European-based Stellar Group, announced a restructuring of Dongfeng Peugeot-Citroën Automobile Company (DPCA), with a total investment exceeding 8 billion yuan, primarily focused on the new energy vehicle sector. This marks a significant leap for Chinas automotive industry from "bringing in" to "going global," demonstrating the completeness of my countrys new energy vehicle industry chain and supply chain, and its strong appeal to global capital.On May 15, Foreign Ministry Spokesperson Guo Jiakun held a regular press conference. A reporter asked, "The White House claims that during the meeting between the Chinese and US leaders, China agreed to reopen the Strait of Hormuz. Can China confirm this?" Guo Jiakun stated that the recent ceasefire between the US and Iran, exploring solutions through negotiations, has been welcomed by regional countries and the international community. China has always maintained that dialogue and negotiation are the right path, and that a military solution is not the way forward. Now that the door to dialogue has been opened, it should not be closed again. The momentum of easing tensions should be stabilized, the general direction of a political solution should be upheld, and a solution that takes into account the concerns of all parties should be reached through dialogue and consultation on issues such as the Iranian nuclear issue. The strait should be reopened as soon as possible to respond to the calls of the international community and jointly maintain the stability and smooth flow of global supply chains. A comprehensive and lasting ceasefire should be reached as soon as possible to promote the early restoration of peace and stability in the Middle East and the Gulf region, laying the foundation for building a sustainable regional security architecture.Russian Foreign Minister Lavrov: Russia hopes to end the war with Iran and achieve a sustainable solution.Russian Foreign Minister Sergey Lavrov: Western intervention, whether through military force or regime change, will increase the complexity of the situation in the Middle East and North Africa.On May 15, Foreign Ministry Spokesperson Guo Jiakun held a regular press conference. A reporter from The New York Times asked whether China and the United States had reached any agreements on agriculture. Guo Jiakun stated that during the visit, both sides reached important consensus on maintaining stable economic and trade relations, expanding pragmatic cooperation in various fields, and properly resolving their differences. China is willing to work with the United States to implement the important consensus reached by the two heads of state, based on the principles of equality, respect, and mutual benefit, to continuously expand the list of cooperation and achieve mutual benefit and win-win results.

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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