Negative stability of gold prices for the first time in five sessions, condoning the decline in the US dollar index to its lowest level in two months


Negative stability of gold prices for the first time in five sessions, condoning the decline in the US dollar index to its lowest level in two months

Gold price futures fluctuated in a narrow range that tilted back down during the Asian session to witness its rebound from its highest since February 24, when it tested its highest since January 23, 2013 amid the dollar index rebound to the ninth session in twelve sessions from the top It has been since April 21, 2017, explaining the lowest since January 2, according to the inverse relationship between them following the speech of the members of the Federal Committee and on the threshold of the expected economic data today by the American economy, which includes the speech of another member of the Federal Committee.

At exactly 04:06 AM GMT, the gold futures contracts for April delivery decreased 0.20% to trade at $ 1,669.80 per ounce compared to the opening at $ 1,673.10 per ounce, knowing that the contracts started the trading session on an upward price gap after yesterday’s trading was concluded At $ 1,668.00 an ounce, while the US dollar index fell 0.06% to 96.56 compared to the opening at 96.62.

We have just followed the talk of members of the Federal Open Market Committee, President of the Federal Reserve Bank of Minneapolis Neil Kashkari, who participated in a panel discussion at the University of Minnesota in St. Paul, and the talk of New York Federal Reserve Chairman John Williams about monetary policy and economics at the Financial Services Dinner of the Foreign Policy Association in New York.

This came amid markets’ aspiration to reveal the US labor market data for the past month, which may reflect the stability of unemployment rates at 3.6%, little changed from what they were in January, with a reading of the employment change index for sectors other than agriculture showed a slowdown in the pace of job creation To 175 thousand jobs compared to 225 thousand jobs in January, while reading the average hourly income index may show that the growth accelerated to 0.3% compared to 0.2%.

This comes in conjunction with the release of the trade balance reading, which may reflect the narrowing of the deficit to $ 46.3 billion compared to $ 48.9 billion in December, and before the disclosure of the final reading of the wholesale inventory index, which may explain the stability of the decline at 0.2%, up to the participation of Williams along with a member Another on the Federal Reserve is Boston Fed President Eric Rosengren at a panel discussion titled “Monetary Policy and Lower Zero” in New York.

Other than that, last Wednesday, we followed the report that touched upon the fact that the US Congress approved a $ 8.3 billion financing package to support stakeholders in the fight against the Corona Virus, and we also followed up on Wednesday the announcement of the Director of the International Monetary Fund, Kristalina Georgieva, about a $ 50 billion aid package allocated to countries ’markets Low income and emerging around the world in the form of interest-free loans as part of efforts to combat the global spread of the Corona virus.

In the same context, Georgieva, in her speech yesterday to the “CN-NBC”, expressed that the Fund would like to see the use of those funds allocated as an aid package, first to enhance health care and then to the targeted financial stimulus program and to enhance liquidity in emerging markets, and that came The package of aid after many international central banks cut interest rates and benefited from their intention to expand the adoption of stimulus if necessary.

It is noteworthy that Bank of Japan Governor Harhiko Kuroda pledged earlier this week that the Bank of Japan will take the necessary steps to stabilize the financial markets, and the Japanese Central Bank has quickly demonstrated the type of measures it will take by offering to buy 500 billion yen ($ 4.6 billion) of government bonds. With the repurchase agreement to provide liquidity to market participants, which in turn contributed to allaying investor concerns regarding the risks of the spread of Corona.

This was followed by the Reserve Bank of Australia’s resumption of interest rate cuts this year, with a 25 basis point cut to an absolute minimum of 0.50%, which came in line with expectations, with the benefit from the Australian Central Bank’s interest rate statement preparing the Bank of Australia The reserve for further reduction later, after fixing it in the previous three meetings and after reducing it three times by 25 basis points last year.

Also, we followed up on Tuesday, the Federal Reserve held a sudden meeting, during which members of the Federal Open Market Committee decided to reduce the interest on federal funds by 50 basis points to between 1.00% and 1.25% after fixing them in the previous two meetings of the Federal Reserve at between 1.50% and 1. 75%, and after reducing it three times by 25 basis points in previous meetings last year.

In the same vein, we also followed up on Tuesday, the press conference held by Federal Reserve Governor Jerome Powell after the decision to suddenly reduce markets to short-term benchmark interest rates, through which he noted that the decision came to support the American economy, while touching that over the past years wages increased and improved The labor market and that the committee has repeatedly stressed that the current monetary policy is appropriate.

Powell also noted at the time that several risks arose and the current situation became in a state of uncertainty, which made the Federal Committee see the existence of fundamental changes that prompted it to take a reaction, adding that over the course of the months and weeks ahead, the committee will work to monitor markets and developments and take appropriate decisions to support the economy He explained that the American economy is strong, but it is difficult to determine the extent of the negative effects of the spread of the Corona virus locally and globally.

Powell stressed during the press conference that the committee’s decision to cut interest at Tariq’s meeting for the first time since the global financial crisis that occurred more than a decade ago and by 50 basis points, which is rarely made by the Federal Reserve, is not a political decision but rather stems from a vision The Federal Committee for Current Events, and this came after US President Donald Trump repeatedly asked the Federal Reserve and Powell County to cut interest and expand stimulus.

Up to the Bank of Canada’s Wednesday cut interest rates by 50 basis points for the first time since the beginning of 2009 to 1.25%, after fixing them in the previous ten meetings at 1.75%, which came in line with expectations, and the Canadian Central Bank’s statement also stated that the decision comes in While the economy is close to reaching the inflation target, the risks looming as a result of the global spread of corona is the reason for this rate cut.

We would like to point out that the Governor of the Bank of Canada Stephen Poloz yesterday expressed the Canadian Central Bank’s willingness to cut interest rates further if necessary, and also Bank of England Governor Mark Carney noted yesterday that the collective response to the corona will be more effective and faster, and this came amid expectations That the European Central Bank and the British Central Bank append the approach of the Australian Central Bank and Federal Reserve to ease monetary policy and cut interest rates.

Given the developments in the global spread of the Corona virus, which started in Wuhan, China, and has killed at least 3,300 people so far, the deadly virus has spread to more than 80 countries, and it has been confirmed that there are more than 97,800 cases infected with coronavirus, which drives Investors are pricing Corona’s impact on the global economy, which may be affected negatively significantly during the first quarter of this year at the very least.


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