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On October 15th, when asked whether he had discussed the inflation report with Federal Reserve Chairman Warsh and the markets increasing bets on interest rate hikes, US President Trump said, "Were doing very well. Inflation has been 1.7% over the past three months. We took over from Biden facing an extremely bad inflation situation. Were doing very well now."On October 15th, according to the Financial Times, four sources familiar with the matter revealed that the United States has proposed to European countries to unfreeze some of Russias sovereign assets frozen since the outbreak of the Russia-Ukraine war and transfer these assets to an institution overseen by Washington, in order to seek to restart peace negotiations. How these assets will be unfrozen and how the funds will be used are still under discussion. This idea was raised at a discussion held in Miami last week, with participants including Trumps peace negotiators and officials from Ukraine, France, Germany, the United Kingdom, the European Union, and NATO. However, this proposal was rejected by European representatives. This has shocked European governments and Kyiv, raising questions about the United States intentions and highlighting a starkly different stance taken by the United States in its efforts to end the Russia-Ukraine war.Samsung Electronics fell 6% in pre-market trading in South Korea, SK Hynix fell 7%, and overnight US memory chip stocks generally declined.According to the Financial Times, the United States is considering unfreezing some Russian assets in order to restart peace talks in Ukraine.The UK government will provide £17 million to repair the Chernobyl nuclear power plant damaged last year by a Russian drone attack.

Gold Price Forecast: XAU/USD maintains rises above $1,900; downside appears bolstered by robust yields

Alina Haynes

Jan 18, 2023 14:56

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During the Asian session, the gold price (XAU/USD) exhibits a sideways auction profile above the round-level support of $1,900.00. The precious metal is able to maintain a price above $1,900.00. Tom Barkin, president of the Richmond Federal Reserve (Fed) Bank, made hawkish remarks that boosted US Treasury yields. However, the downside appears to be supported by the rising yields.

 

According to Fed officials, the economy has passed the inflation peak, but we are still far from the Consumer Price Index median (CPI). Therefore, a premature retreat from interest rate hikes is undesirable. 

 

Meanwhile, market volatility is increasing as risk-perceived assets lose traction. Futures on the S&P 500 have accelerated their losses, indicating that the risk-aversion theme is gaining traction. A drop in market participants' risk appetite has impacted the demand for US government bonds. This has caused 10-year US Treasury yields to rise above 3.54 percent.

 

In the future, investors will pay close attention to the United States Producer Price Index (PPI) (December) and monthly Retail Sales (December) statistics. According to estimates, the headline PPI (Dec) is anticipated to decline to 6.8%, while the core PPI is anticipated to decline to 5.9%. In addition, monthly Retail Sales statistics may indicate a 0.1% growth as opposed to the 0.6% decrease previously reported. A rise in Retail Sales statistics could increase the likelihood of a rebound in inflation estimates.


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