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January 16, the minutes of the European Central Banks December meeting released on Thursday showed that policymakers concluded last month that the European Central Bank needs to cut interest rates cautiously and gradually, but further easing may be possible in the future. The ECB cut interest rates for the third time in a row last month and said that it would further ease policy in view of the slowdown in inflation, but the timing and speed of the rate cuts remain to be discussed. The minutes of the ECB meeting pointed out that "given the current uncertainty, this cautious approach is still reasonable, but if the benchmark forecast for inflation in the coming months and quarters is confirmed, it is considered appropriate to gradually relax policy restrictions." With almost no economic growth at present, the ECBs focus has shifted from excessive price growth to weak economic activity, and more and more policymakers now advocate that interest rates should at least be lowered to a level that no longer hinders economic growth. The central bank will hold its next meeting on January 30, and investors have fully digested its expectations of another 25 basis point cut. The benchmark interest rate is expected to fall further to 2% by the end of 2025.Ukrainian President Zelensky: Britain will provide Ukraine with $3 billion from frozen Russian assets.ECB meeting minutes: Medium-term inflation risks are more inclined to the downside.Bank of America (BAC.N) CFO: Despite the uncertain interest rate outlook, deposits still show potential growth in the coming months.Bank of America (BAC.N) Chief Financial Officer: The banks operating income has reached its highest level in more than a decade.

Gold Price Prediction: XAU/USD recovers within the weekly bearish trend, Covid; Treasury yields in focus

Daniel Rogers

Nov 22, 2022 14:56

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Early Tuesday morning, the gold price (XAU/USD) reaches $1,745 for the first daily increase in four. In doing so, the precious metal applauds the wide US Dollar decline during a likely sluggish day preceding Wednesday's crucial data/events.

 

Consequently, the US Dollar Index (DXY) falls intraday by 0.25 percent to 107.55, halting a three-day rally. Recent challenges to the hawkish concerns surrounding the US Federal Reserve are reflected in the dollar's metric, which tracks US Treasury yields (Fed).

 

The US 10-year Treasury yields decline for the first time in four days, falling one basis point to around 3.81% as of press time, as the most recent remarks from Federal Reserve (Fed) members fail to buttress the previously hawkish attitude.

 

In a CNBC interview, Loretta Mester, president of the Federal Reserve Bank of Cleveland, stated, "I think we can ease down from 75 in the December meeting." Previously, Atlanta Federal Reserve President Raphael Bostic rejected the 75 basis point move and challenged the DXY bulls. In addition, October readings of -0.05 for the Chicago Fed National Activity Index, compared to the prior reading of 0.17, posed a challenge to US Dollar bulls.

 

On the other hand, a seven-month high in daily coronavirus cases from China rekindled fears of a supply bottleneck and gave US Dollar purchasers optimism ahead of tomorrow's preliminary monthly activity data and Federal Open Market Committee (FOMC) Meeting Minutes.

 

In addition, the most recent articles from Nikkei Asia imply that China is likely hoarding the metal while selling US Treasury bonds, which gives buyers of gold reason for optimism.