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Canadian Trade Minister: Canada and Japan are collaborating on mining projects, including a potential joint reserve.On June 26, a container ship was attacked in the Strait of Hormuz on Friday, prompting some shipowners to reassess their evacuation plans, but traffic in both directions on this crucial waterway continued. Tanker tracking data showed two fully loaded tankers leaving the Persian Gulf, while four empty Very Large Crude Carriers (VLCCs) were sailing off the coast of Oman, along the southern route managed by Oman and coordinated with the United States. Meanwhile, some vessels opted for the northern route on the Iranian side. Administration of the Strait of Hormuz remains a focal point of the US-Iran dispute. The US stated this week that Iran must maintain free passage through the strait if it wants a permanent peace agreement. Secretary of State Rubio warned during a visit to Gulf states that if Iran charges fees, other countries might follow suit, leading to chaos. The US is pressuring Oman, which also borders the strait, not to establish a joint toll system with Iran. Omans stance remains unclear: on Tuesday, it issued a joint statement with Iran stating it would discuss passage management and related costs, but Rubio said on Thursday that Oman assured him it did not support tolls.June 26 - The dollar edged lower as markets lowered their expectations for a Federal Reserve rate hike. Thursdays data showed the personal consumption expenditures price index (PCE) rose 0.4% month-over-month, below economists forecasts of 0.5%. Deutsche Bank analysts said in a report that this "has somewhat dampened the increasingly heated Fed rate hike narrative in recent weeks." They stated that while Fed officials remain cautious about the inflation outlook, there is growing speculation that the Fed may not need to raise rates at all this year.June 26 – The seventh meeting of the Joint Committee on the China-Korea Free Trade Agreement (FTA) was held in Beijing on June 25. Li Chenggang, Vice Minister of Commerce and International Trade Representative, and Yeo Han-koo, Minister for Trade Negotiations of the Ministry of Trade, Industry and Energy of the Republic of Korea, co-chaired the meeting. Both sides reviewed the implementation of the China-Korea FTA, highly praised its contribution to promoting the integration of industrial and supply chains between the two countries and driving economic growth, and conducted in-depth communication on specific issues of concern regarding the implementation of the FTA. The China-Korea FTA officially came into effect on December 20, 2015. To date, both sides have implemented twelve rounds of tariff reductions under the agreement, contributing to the continued expansion of bilateral trade. The two countries are currently advancing the second phase of negotiations on the China-Korea FTA, aiming to further enhance the liberalization and facilitation of trade in services and investment between the two countries.Statoil: This decision reflects a reassessment of strategic direction, with a further focus on the integrated electricity market.

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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