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According to a Nikkei survey, Japanese Prime Minister Sanae Takaichis approval rating has dropped to 66%.On May 31, White House National Economic Council Director Hassett stated on Sunday that the way the media reports economic news often leads to an overemphasis on the most serious problems at a particular moment. "One thing Ive noticed in the White House is that whenever a consumer price index looks a little disappointing, we just talk about that one thing," Hassett said during an appearance on ABCs "This Week." He was referring to gasoline prices and their impact on inflation. Hassett stated that everyone should look at the big picture, not just energy prices or a particular area of the economy that is temporarily experiencing difficulties. "What you should do is take these fluctuations in stride and focus on changes in real wages," he said. "If you look closely, youll see that increased employment, a rising stock market, and strong corporate profits are translating into higher wages."Iranian President: In the face of major challenges, no society can expect to move forward without enduring difficulties.Iranian President: It is necessary to be honest with the people about the current situation so that they can play a role in addressing the challenges.On May 31st, STMicroelectronics, a major manufacturer of MCUs and power semiconductors, issued a "Price Adjustment Notice" to its customers on May 28th, announcing a price increase for some products effective June 28, 2026. This is STMicroelectronics second price increase this year, following its initial announcement on March 24th. The fact that STMicroelectronics has announced another price adjustment just two months later highlights the continued pressure on its cost side.

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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