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On July 21st, ByteDances XR (Extended Reality) business, PICO, recently completed a change in its head: due to personal planning reasons, founder Zhou Hongwei will no longer serve as the head of PICO, and Li Xiaokai will take over as head, fully responsible for PICOs business. It is understood that this management handover will not affect PICOs established strategic direction, R&D work, or product plans. This year, PICO will launch a brand-new Mixed Reality (MR) product as planned. As the founder of PICO, Zhou Hongwei has made significant contributions to PICOs growth over the past 11 years. PICO has internally issued a notice confirming Zhou Hongweis departure from the company and expressing gratitude for his long-term dedication and contributions.In a report, Magdalene Teo, Asia fixed income analyst at Julius Baer, noted that with renewed escalation of tensions between the US and Iran, most Asian central banks are likely to maintain their current interest rates and remain hawkish. The report stated that economic growth in Asia is expected to slow this year due to supply chain disruptions and the ongoing impact of global energy price shocks, with both consumers and traditional industries facing pressure. Teo anticipates that the central banks of Japan, South Korea, Indonesia, and the Philippines will maintain a hawkish stance. She added, "However, if US economic data continues to weaken, a weaker dollar could provide some room for Asian central banks to support economic growth."Sanjay Raja of Deutsche Bank stated that the latest UK employment data shows the labor market remains fragile, but initial signs of stabilization have emerged. The data shows the UK unemployment rate remains relatively high at 4.9%, and wage earners have declined again. However, job vacancy data has improved, with the number of job advertisements increasing for the first time since December last year; in the three months to May, layoffs fell to 108,000, the lowest level since July last year. Raja said that the Bank of Englands survey suggests the job market may be turning around, with employers now planning to maintain largely stable staff sizes. Slower wage growth will also be reassuring for the Bank of England as it pushes inflation back to its target level.Kremlin: Russia will continue to crack down on ships involved in supplying the Ukrainian military.Uganda Aviation will purchase four 737-8 aircraft and four 787-9 aircraft from Boeing (BA.N).

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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