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With the US-Iran negotiations still unresolved, international oil prices remain high. A quick overview of the pre-market conversion prices of crude oil between domestic and international markets is provided in this chart.According to Futures News on August 10, as of 20:30 Beijing time, WTI crude oil futures rose 2.88% and US natural gas futures rose 4.17%.According to A95 Consulting, gasoline imports in Ukraine increased by 34% in July.Iranian President: The meeting with the Supreme Leader lasted 7-8 hours.On August 10th, according to Kyodo News, several Japanese government officials revealed that the Japanese and US governments conducted an unusual joint intervention to buy yen on July 31st (US Eastern Time), the first such action in 28 years. The decisive factor was that Bank of Japan Governor Kazuo Ueda strongly hinted at a press conference that day (July 31st) that policy interest rates would be raised as soon as possible, in September or later. Ueda explicitly stated that if necessary, the pace of interest rate hikes would be "accelerated." The US side gave a positive assessment, and both sides were aligned in preventing excessive yen depreciation. This is because the US is concerned that Japans slow pace of interest rate hikes has led to excessive yen depreciation, which could trigger further price increases and a rise in long-term interest rates, potentially impacting global financial markets. A senior Japanese government official revealed: "Governor Uedas statement was very persuasive to the US. At the same time, this also means that the Bank of Japan has no choice but to raise interest rates at its next policy meeting (September 17-18)."

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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