by Jrg Bernhard
While interest rates in the euro zone hasn’t done anything yet, the Fed has hiked US interest rates by 150 basis points this year alone. And there are more rate hikes looming, after all, futures exchange operator CME Group’s FedWatch tool currently shows a nearly 78 percent probability that we could see further hikes of 175 or 200 basis points by the end of the year. As a reminder: A month ago, only a value of 63 percent was displayed here. Whether rising opportunity costs justify recent gold price weakness remains to be seen. In view of the high inflation, holders of US Treasury bonds will probably continue to lose purchasing power. On Wednesday, market players will find out how the US inflation rate developed in June. According to a survey of analysts published by Trading Economics, this is said to have increased from 8.6 to 8.8 percent.
On Tuesday morning the price of gold presented itself with declining quotations. By around 8:00 a.m. (CEST), the most actively traded futures on gold (August) had fallen by 5.30 to $1,726.40 per troy ounce.
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Rohl: Persistent descent
Two concerns are currently dominating market activity on the markets. First: In China, several cities have announced renewed restrictions due to increasing new infections. Secondly, fears of a recession just won’t go away. Both could cause the demand for oil to drop noticeably. The weekly report from the American Petroleum Institute, which is scheduled for publication at 10:30 p.m. and could have a significant impact on the trend for tomorrow’s trading day, should now attract increased attention. Additional tension is also generated by the upcoming visit of US President Joe Biden to Saudi Arabia.
On Tuesday morning, the oil price presented itself with falling quotations. As of around 8:00 am (GMT) the WTI futures next due is down 2.00 to hit $102.09 while its Brent counterpart is down 1.82 to hit $105.28.
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