The Federal Reserve Development.
Ahead of the PCE price Index, which is also the Fed’s favorite inflation gauge, released this week, several Fed members are shifting their concerns about the inflation problem, fading out on further easing after the last rate cut decision.
Although most of them also see upside risk to both mandate—labor market conditions and inflation, they also affirm that there is no stagflation nor recession at the current speed. However, they project to see some softening in the labor market, which could put some reluctance on businesses’ hiring activities. Even JPMorgan Jamie Dimon also believes that the FED will face a difficult rate cut decision if inflation does not disappear.
→ Signs in seeing a road block for easing, the FED playing a cautious approach here, albeit still open for a rate cut → could diminish the rate cut probability ahead of the October and December rate cut → a factor in downgrading gold’s appreciation.
Russia-Ukraine
While Russia has aimlessly violated the airspace of NATO member countries and destroyed several buildings in Ukraine for years, US President Donald Trump is now open to NATO strike back if this continues (allowing others to shoot down the Russian aircraft) while promising to supply weapons to NATO. He also cited that, “I think Ukraine, with the support of the European Union, is in a position to fight and WIN all of Ukraine back in its original form.”
And yet, another source also reported that Iran and Russia have now signed on nuclear power plant, ahead of the potential sanctions imposed by the US and Europe.
→ All of these are evolving into a greater geopolitical tension between Russia and Ukraine, and NATO members.
As for Israel-Gaza, Trump also called to end the Gaza war immediately in the UN General Assembly speech, calling out the UN as “ineffective; and describing migration and renewable energy as the biggest threats facing the “free world”.
China’s GOLD move
According to a Bloomberg source, “China aims to become custodian of foreign sovereign gold reserves,” meaning that China wants to hold and manage gold reserves for other countries to boost its influence in the global gold market. As per Wael Makarem, financial markets strategist, lead at Exness. “Investors could be interpreting this as incremental de-dollarization momentum, which could support gold.”
→ a support for GOLD in favor early this week.
