THE PRECIOUS METAL
With several obstacles, the price of gold (XAU/USD) has dropped to about $1,940 and is still vulnerable to further declines, due to the lack of a noticeable increase in Middle East tensions, hawkish remarks from Federal Reserve (Fed) Chair Jerome Powell and his colleagues, and uncertainty around the US Consumer Price Index (CPI) data for October – which is released on Tuesday.
After Jerome Powell stated that he was less certain that the existing interest rate strategy was sufficiently restrictive to bring inflation under control, the case for gold became much weaker. US inflation data will determine whether more interest rate hikes are necessary, and this information will drive future movements in the US dollar, bond markets, and gold price.
As the UK economy avoids a decrease in economic activity in the third quarter, the pound sterling finds some optimism. The GBP/USD pair makes an effort at a brief rebound based on optimism, but growth outlook predictions are pessimistic since new investments by businesses in capacity development in the most recent quarter were sharply lower than expected because of weak demand from both local and international markets.
Policymakers of the Bank of England (BoE), Huw Pill and Katherine Mann, are expected to support earlier rate cuts as concerns about a deepening recession continue to mount. They are concerned about the ripple effects of higher interest rates in the fight against sticky inflation. The UK labour market statistics, which will be released on Tuesday at 07:00 GMT, will drive forward movement in the pound sterling.
As Federal Reserve (Fed) Chair Jerome Powell and his colleagues pushed towards rising interest rates further to drive the monetary policy to a sufficiently restrictive stance, the price of silver (XAG/USD) dropped precipitously to around $22.00.
Last week, Jerome Powell stated that the central bank will not be reluctant to increase interest rates in order to guarantee the attainment of price stability. While Thomas Barkin and Mary Daly, two Fed members, continued to be undecided about boosting interest rates
The price of oil has already dropped by 20% after peaking at $94 at the end of September. As it appears like OPEC+ will not be able to provide the markets any reason to drive oil prices higher at this time, oil prices are falling. The volume of unfavourable news reports about China’s and other major demand-side representatives’ declining demand is too strong of a catalyst to ignore Russia’s and Saudi Arabia’s meagre supply-side efforts.