Notwithstanding the US Dollar falling this week, gold is still having trouble rising from previous lows.
Although gold has barely managed meager gains of 0.3 % already, the USD (DXY) index is currently down roughly 1.3%.
A multitude of variables that have also bolstered equities markets together with growth and commodity-related currencies are to blame for the weaker US Dollar.
The likelihood of a rate increase by the Fed of 100 bps has been reduced by the market, which now anticipates a 75 bps increase next week. The benchmark 10-year Treasury yield rising back over 3% serves as maybe the finest illustration of the significant departure from havens.
A belief that possibly all the negative news has already been revealed appears to have boosted the share market.
When Netflix revealed that it had lost fewer customers than the market had anticipated, its stock price rose. When a judge permitted them to expedite their lawsuit against Elon Musk, Twitter also benefited.
Due to favorable weather projections in the US, corn, and soybean prices have decreased this week. Egypt canceled bidding and is attempting to refill silos, which has caused wheat prices to rise somewhat.
After mining behemoth Vale SA indicated that they would cut back on iron ore output, the latest decline in the price of iron stabilized today. Although other base metals have remained largely unaltered during the Asian session, steel has also gained some support.
Despite rumors that China may have lowered the 5-year loan prime rate (LPR) to appease mortgage holders of ongoing projects, rates remained stable. There is mounting concern that the effects of Chinese builders defaulting could trickle down to major roads from financial markets and developers.
Europe wants to lower its gas usage by 15%, but there is still ambiguity about how much gas will flow via the Nordstream 1 pipeline due to concerns that Moscow may reduce gas supply over the winter of 2022/2023.
Growing rumors that the ECB will implement a 50 bp raise on July 21 caused the EUR/USD to increase. The overnight index swap (OIS) market has 37.5 bps factored in, with the market divided in 25 and 50 bps.
As Philip Lowe, the Reserve Bank of Australia (RBA) Governor reiterated the need to combat inflation now in order to avert significantly higher interest rates in the future, the AUD/USD exchange rate increased. Simultaneously, information on a review of the RBA was released.
The CPI data will be released after the UK’s later in the day, and the earnings report of Tesla will also be coming in.