Aside from the concerns over the trade tension between the US and China, geopolitical tensions, or even the prolonged US shutdown, the gold prices last night were also affected by other new factors, such as:
US Regional Bank
Growing concerns over the US credit market came when the US regional banks were rumored to be involved in fraudulent activities, from the lender to the borrower. And that is like fueling more oil into the fire that is already worsened by the US shutdown. Panic mode crept into the market and sent the gold price higher last midnight. The Bank stocks tumbled after the news release.
Other Update:
Russia-Ukraine Development
Trump announced he will meet Russian President Putin in Budapest within two weeks, after a “productive” phone call. Trump plans to brief Ukrainian President Zelenskyy on these talks during their Friday Washington meeting, where Zelenskyy is expected to appeal for Tomahawk missiles to strike deeper into Russian territory. And yet, Putin continues to pressure Trump on this matter, as this will bring more challenges to their relationship. In fact, Putin told Trump that Tomahawk missiles would not change the battlefield situation but would harm US-Russia ties and the peace process.
Meanwhile, some also reported that North Korea is secretly assisting Russian missile strikes while guiding them from Kursk into Ukraine’s Sumy region. Amid this talk, Russia continues its bombardment of Ukrainian infrastructure, leading to several blackouts in the city.
The Federal Reserve
The Federal Reserve member Waller sees further softening in the labor market conditions as a “clear warning,” saying that the FED should be ready to cut the interest rate toward a more neutral level (between 100-125 bps below the current rate) if the job weakness persists. All of these still come after he acknowledges a conflict between strong economic growth and the absence of the labor market boom, while seeing some loosening in the financial conditions. Other than that, most of the FED still speak over and over again about the soft labor amid persistent inflation. At the same time, some, including the FED’s Kashkari, also brought out the challenge in interpreting signals without complete government data. All in all, the market is still priced in higher for easing.
