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July 20th - According to South Korean media reports, SK Group Chairman Chey Tae-won stated that SK Hynix is currently searching for a location in the United States to build a chip factory, aiming to increase supply capacity and curb prices, given that demand for memory chips far exceeds supply. As a major player in the industry, he believes the current price level is excessively high and an "abnormal" phenomenon. Chey Tae-won stated, "I believe we need to build (a chip factory) not only in Gwangju and Jeolla Province, but also in the United States." "If conditions permit, I think it should be built. This involves trade pressures and other factors that need to be weighed, so we are considering this."On July 20, the U.S. Central Command announced on social media that a U.S. military personnel died on July 18 while on a mission related to Iran in northern Iraq. Additionally, the U.S. military is searching in Jordan for a U.S. personnel who went missing after the Iranian attack on July 17; unidentified remains have been found, and identification and verification are underway.July 20 – According to the Washington Post, the United States and Iran moved one step closer to a full-blown conflict on Sunday. Attacks on civilian and military facilities have escalated, and at least three (possibly four) U.S. military personnel have been killed since fighting resumed a week ago. In a brief phone interview with NewsNation on Sunday, Trump said he was “completely unconcerned” about Iran’s announcement that it would no longer abide by the bilateral memorandum of understanding reached a month ago. A U.S. official familiar with internal government discussions revealed, “The United States is planning a much larger war,” adding that the Pentagon is increasing the number of military aircraft in the region. However, the official also cautioned that the expansion of U.S. military operations will be constrained by several factors: dwindling stockpiles of air defense and long-range munitions, and limitations imposed by combat losses on the ability to rapidly deploy more troops and aircraft to the region.According to Saudi Arabias Al Arabiya TV: Iranian media reported that an explosion occurred in Delijan, a city in the southern part of Markazi province (Central Province), and another explosion occurred in Arak, a city in western Iran.Faraday Future (FFIE.O): Announced a partnership with the Argentine Football Association (AFA), officially becoming the official regional sponsor of the Argentine national team in the North American robotics and related robotics technologies sector.

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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