EUR/USD 1.15856
0.095%
Gold 4347.34
0.304%
Oil 84.452
0.171%
USD/JPY 159.296
-0.196%
GBP/USD 1.35413
0.074%
GBP/JPY 215.712
-0.114%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
On August 19th, Iranian Foreign Minister Araqchi stated in an interview broadcast on August 18th that the recent military conflict between Iran and the US and Israel proves that relying on external military forces and bases cannot guarantee the security of Gulf countries. Araqchi pointed out that the presence of US troops and military bases not only fails to provide security guarantees for the countries involved, but has instead become a factor undermining security; countries without US military bases are actually safer. Araqchi also stated that Iran is not seeking merely a ceasefire, but hopes for a complete end to the war and does not want to fall into a cycle of short-term ceasefires followed by renewed fighting.Russian officials said that after a drone crashed in the Ufa industrial zone, authorities are working to extinguish a small fire.On August 19th, Joey Chew, Head of Asian FX Research at HSBC, stated that with the yen gradually weakening again, the Bank of Japan (BOJ) has an opportunity to support the yen through a hawkish rate hike at its next meeting in September. The market currently expects the BOJ to raise interest rates by a cumulative 80 basis points over the next 12 months, bringing the rate to 1.8%. Meanwhile, HSBCs economic research team now predicts that the BOJ will raise rates twice more, in September and the first quarter of 2027, ultimately reaching a rate of 1.5%. HSBC previously only predicted a single rate hike by the BOJ in December. In a report, Joey Chew pointed out that the key to the yens continued recovery depends on whether real interest rates become more attractive, whether fiscal concerns ease, and whether Japanese residents shift from overseas assets to domestic assets.Russian authorities in Ufa claim that drones attacked industrial facilities.The Nikkei 225 index fell by more than 3%.

Gold Price Prediction: XAU/USD bears at $1,650 on Fed hawkishness and China news

Daniel Rogers

Sep 19, 2022 14:34

 161.png

 

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.

Suggestion