Introduction
Welcome to our Monday news highlights. Hope everyone had a good weekend. Our article today looks at the stock market and the views of analysts. The Federal Reserve looks to be taking on a more hawkish stance in its monetary policy approach, which has created some uncertainty among investors.
Stock Market
- US stock markets closed on Friday with losses as the Federal Reserve realigns its stance to be increasingly hawkish. In a panel discussion with the IMF (International Monetary Fund), Fed chair Jerome Powell indicated that the Fed is moving too quickly in its decision making on interest rates. Powell said that a rate hike of 50 basis points is up for discussion during the Fed's meeting early next month but leaves the door open for additional moves in the months ahead.
- Osterweis Capital Management Portfolio Managers have quoted the Fed indicating that they can increase the target fed funds rate to cool off the economy while reducing its balance sheet to lift longer maturity rates and contain inflation. However, according to portfolio managers, implementing a dual-pronged quantitative strategy requires finesse that the Federal Reserve is not known for.
Performance Index
a) Dow DJIA - (-2.82%)
b) S&P 500 - (-2.77%)
c) Nasdaq Composite (COMP) - (-2.55%)
The performance of the three indexes has been down for the last three to four weeks.
- Investors next week will be eyeing March inflation data. Solloway at SEI indicates the Personal-Consumption-Expenditures price index to show higher living costs due to the rise in prices of food and energy.
Russia-Ukraine
- The market is eyeing Russia & Ukraine closely as they anticipate additional supply chain disruptions and market volatility as the war continues.
- Clifford Bennet, Chief Economist at ACY Securities, believes that the only way to "protect your investment portfolio is to be cautious on equities and buying gold, oil and the Us dollar".
- US Officials meet today with President Volodymyr Zelensky. The Ukrainian president is appealing for additional military aid from the US.
- Ukraine's top economic advisor, Oleg Ustenko, released a statement indicating $1 trillion of losses for Ukraine as houses are destroyed, and the country's infrastructure disrupted.
Gold Prices
- On Monday, 25th April, Gold prices open with a new low at $1,927/ounce.
- The Gold/USD is moving as investors are focused on the Federal Reserve and bracing for a faster-than-expected pace adopted by the central bank to reduce inflationary pressures.
- Analysts at TD Securities have said that despite the hawkish stance of the Fed due to geopolitical uncertainty, the war on Ukraine and demand for havens, there are several remaining participants with an appetite for gold.
Sources
ABC News
CBS News
FX Street
Market Watch
The Guardian
Weekly Gold Investment Series Guide
Checkout our blog weekly or subscribe to our newsletter for the latest Gold Investment Guides
Click here to visit our Blog
Click here to Subscribe to our Newsletter
Introduction
Welcome back viewers to our weekly article series where we bring you the latest news. Our topic today covers the outlook of the Federal Reserve members, statistics on inflation, Russia - Ukraine situation, and the gold price.
Federal Reserve
- San Francisco Fed President Mary Daly indicates that the upcoming series of interest rates over the coming months could create a recession.
- Comparing current and historical inflation figures suggests that the US is experiencing the worst inflation in the last 40 years. The Fed indicates that interest rate hikes are expected to have "neutral" consequences, neither stimulating nor repressing growth.
- Daly cites former Fed vice chair Alan Blinder, who asserts that in the previous 11 hiking cycles, "seven of which were followed by a mild recession or none, quoting a smooth landing". In a later interview, when asked whether a mild recession is considered a soft landing or an acceptable outcome, Daly comments the outlook is "to slow the economy into something below-trend growth but not into negative territory.
- Wall Street economists Deutsche Bank and Gold Sachs forecasts a negative outlook over the next two years, all-seeing the rising recession risks.
- The market still maintains that the Fed will deploy a series of aggressive interest rate hikes over the coming months. Beginning with 25 basis points in March and 50 basis points until a slowdown occurs, taking the benchmark fed funds to 2.5%.
- On Monday, St Louis Fed President Mr Bullard said that he wishes for the Fed to operate responsively with a 75 basis points move. However, traders believe that the drastic action will have no chance of happening.
Russia - Ukraine Update
- On Wednesday, Ukrainian officials indicated that the southern city of Mariupol could fall into Russian hands within "hours". Both countries have agreed to a humanitarian corridor to allow civilians to flee the port city.
- European Council President Charles Michel arrived in Kyiv despite fights persisting between the country's east and south. The president's arrival in Kyiv signifies "strengthening ties between Ukraine and the EU.
- Additional arms and fighter plane aid have arrived in Kyiv to aid the Ukrainians in control of Mariupol. Russia's control of Mariupol and separatist-controlled Donbas in the east would assist Russia in creating a southern corridor to the Crimean peninsula, depriving Ukraine of much of its coastline.
- Moscow has issued a request in the battle of Mariupol, calling for city defenders to surrender.
- The situation in Mariupol is chaotic and horrible. As many as 2,000 people, primarily women and children, are without necessities.
Gold
- Gold has rebounded slightly after hitting a low of $1,939/ounce on Wednesday as the US dollar weakens.
- The market has discounted the announcement made by the Fed on interest rate hikes. Investors are prepared for several scenarios, including a jumbo rate hike, balance sheet reduction, and aggressive hawkish guidance for the year, creating a fall in the gold price.
- More information is to come as the Fed makes its announcement in May.
Source
Bangkok Post
CNBC
FX Street
Weekly Gold Investment Series Guide
Checkout our blog weekly or subscribe to our newsletter for the latest Gold Investment Guides
Click here to visit our Blog
Click here to Subscribe to our Newsletter
Introduction
Welcome back viewers to our weekly article series where we bring you the latest news. Our topic today covers the outlook of the Federal Reserve members, statistics on inflation, Russia - Ukraine situation, and the gold price
Federal Reserve
- Federal Reserve Member Christopher Waller indicates that the Fed will need to act quicker in raising interest rates to combat the unusual pace of inflation.
- Market analysts expect the Fed to increase short-term interest rates by 50 basis points at the upcoming May meeting.
- During an interview with CNBC, Mr Walker mentioned that the data to support an interest rate hike had given the Fed ammunition to alter policies. Mr Walker believes that the economy is equipped to handle a pullback through higher rates.
Statistical Analysis of Inflation, Labour Market & Household Finance
Inflation
- March surveys conclude that median inflation (1 Year ahead) increased to 6.6% from 6.% in February, while median 3-year inflation decreased to 3.7% from 3.8%. The decline in medium expectations is attributed to respondents with no college education and an annual household income of less than $50,000.
- Median Home prices (1 year ahead) have increased from 6.0% to 5.7%. The figures remain double the pre-pandemic figure of 3.0%.
Labour Market
- Median (1 year ahead) earnings growth remains unchanged at 3.0% for March for its third consecutive month.
- Mean unemployment expectations (1 year ahead) have increased by 1.7% to 36.2%.
- The mean probability of job loss within the next year is currently at 11.1% compared to 10.8%. However, the figures seem to improve compared to pre-pandemic figures of 13.8%.
- The mean probability of finding a job (post retrenchment) has declined to 55.7% from 56.5%. The figure remains higher compared to March 2021 at 48.7%.
Household Finance
- The Median Expected growth in household income fell by 0.2% in March to 3.0%. The lowest since August 2021.
- Household expenditure growth increased by 1.3% to 7.7%. However, respondents were derived mainly from college degree holders with an annual household income of above $100,000
- The average probability of missing minimum debt payment over the next three months increased by 1.9% to 11.1%, above the 12 month trailing average of 10%.
- Median (1 Year Ahead) growth in government debt decreased by0.4% to 10.7%, the lowest since December 2020.
- The mean probability of average interest rate on savings account is expected to be higher in a year, from 31.3% in February to 32.6%
- Respondents have indicated that their household financial situation has deteriorated over the year. Many have expected their financial situation to remain similar, if not worse off.
Russia Ukraine
- Ukrainian President Volodymyr Zelensky has called for an oil embargo. Mr Zelenskiy indicates that Europe will have to be prepared to give up all Russian energy.
- The president has confirmed that forensic experts have visited Bucha on Wednesday to investigate possible war crimes by Russia. "Responsibility for the Russian military for war crimes is inevitable. We will drag them all to the tribunal", as indicated by the president.
- US President Biden has announced additional military support for Ukraine of $800million. The total aid provided for Ukraine stands at $2.5billion.
- The UK government has imposed additional sanctions on 206 Russian individuals in response to the massacre of Ukrainian civilians at the train station in Kramatorsk.
Gold Price
- UK Inflation and US Wholesale prices have increased further in March, surpassing market estimates.
- Spot Gold is at a two week high of $1,981/ounce. Gold remains bullish as the Russian invasions persist and inflationary pressures increase in the US and UK.
Source
CNBC
FX Street
New York Federal Reserve
The Guardian
Weekly Gold Investment Series Guide
Checkout our blog weekly or subscribe to our newsletter for the latest Gold Investment Guides
Click here to visit our Blog
Click here to Subscribe to our Newsletter
Introduction
Welcome viewers to our weekly news updates. Today's article discusses the findings of the Federal Reserve of Dallas on US housing prices.
US Housing Bubble
- Researchers & economists at the Federal Reserve of Dallas have raised concerns about US housing prices that have swayed away from their fundamentals.
- Abnormality in the US market behaviour has pointed to signs of a housing bubble. However, any indication on whether it would pop has yet to be argued.
- Researchers at the Fed have indicated a difference in the housing boom today vs the 2007 bubble burst. If it were to happen, the crash would not be comparable in magnitude or macroeconomic gravity to 2007.
- The household balance sheets have appeared to be better, and excessive borrowing does not seem to be attributed to the housing market boom. Researchers today are experienced and well equipped with advanced tools for early detection and deployment of warning indicators.
- Banks, regulators, policymakers, and market participants can assess real-time data on the housing boom.
Causation of a Bubble
- Researchers believe that the bubble's cause is the price-to-rent ratios and price-to-income ratios. When applying the indicators, the 2021 housing prices appear to step out of fundamentals exponentially. Low-interest rates may play a role in rising housing prices, but it merely represents a part of the housing market trends.
- Several drivers, such as the US Fiscal Stimulus programs and Covid-19 supply chain disruptions and associated policy responses, contribute to the trend changes.
Russia & Ukraine
- Russia & Ukraine's delegations wrap up their discussion in Istanbul. As a sign of trust, Moscow has indicated a reduction in force on its offensive operations near Kyiv and Chernihiv.
- Kyiv has offered neutrality in exchange for security guarantees, proposals on resolving the dispute over Crimeria within 15 years of "bilateral negotiations."
- Russia indicates a scale down in its military operations does not mean a ceasefire.
- Further discussions between Russia and Ukraine will take place Friday (1st April 2022).
Gold Prices
- Gold has bounced back from $1,920/ounce to $1,940/ounce as the lack of progress between Russia & Ukraine has impeded confidence in the markets.
- Additional investors have flocked to safe-haven currencies and assets such as the US dollar and gold.
- Energy tensions between EU nations and Russia have worsened as the progression of peace talks has yet to further. If Friday's discussions between Russia and Ukraine do not yield, gold prices may return to $1,960/ounce.
Source
ABC News
Al-Jazeera
Deseret
FX Street
Weekly Gold Investment Series Guide
Checkout our blog weekly or subscribe to our newsletter for the latest Gold Investment Guides
Click here to visit our Blog
Click here to Subscribe to our Newsletter
Introduction
Welcome viewers to our weekly news updates. Our article today talks about the market sentiment on further interest rate hikes and tensions among Russia and its western counterparts.
Federal Reserve
- Fed Chairman Jerome Powell vows to take stringent action on inflation, which has consistently posed a threat.
- With today's circumstances, the traditional interest rate hike of 25 basis points may not cut it. The Fed has indicated that they will continue to raise the rates to 50 basis points to control the spiralling inflation.
- (FOMC) Federal Open Market Committee officials indicate that the 25 basis points are likely to stay, at least for the remaining six meetings of the year. However, polls of market opinion show a 50% chance of the next rate hike taking place somewhere in May.
- The contractionary policy comes with the (CPI) Consumer Price Index figures running at 7.9% over a 12-month basis. Chairman Powell attributes the inflation pressures due to Covid that has affected the supply chain of goods and services.
- Furthermore, Powell indicates that the Russia-Ukraine war has contributed to additional unwanted pressures on the global supply chain and inflation. The Fed, under general circumstances, will review different types of events and not alter policy.
- On Monday, Powell spoke to the (NABE) National Association for Business Economics, indicating that May could see the start of reductions in the central bank's $9trillion balance sheet, which increased during the pandemic in efforts by policymakers to bolster the economy.
- The trimming of the Fed's portfolio of Treasuries and mortgage-backed securities would place downward pressure on inflation.
Russia-Ukraine
- Thursday (24th of March) marks one month since the invasion of Ukraine.
- Russian President Vladimir Putin has been warned by western nations that his country's actions will pay "ruinous" costs for the invasion during a one-day meeting between Nato, G7, and EU summits.
- Ukrainian President Zelenskiy hopes that there will be "meaningful steps" being taken during the summits, identifying allies, partners, and enemies.
- The US said it would announce a package of Russia related sanctions against political figures and oligarchs on Thursday.
- Russian President, in retaliation, has plans to demand payment in roubles for its gas sales to "unfriendly" countries. The announcement has created a shock as it exacerbates the looming energy crisis.
Gold
- Gold has been fluctuating around $1,911 - $1941/ounce since last week. Prices Thursday morning has indicated that gold may be out of the woods as it rallies further despite the hawkish stance of the Federal Reserve.
- The yellow metal seems to be underpinned by market participants despite the Fed's increasing odds of higher interest rates. However, the aggressive contractionary policies of the Fed has failed to control gold prices.
Source
CNBC
Guardian
FX Street
Reuters
Weekly Gold Investment Series Guide
Checkout our blog weekly or subscribe to our newsletter for the latest Gold Investment Guides
Click here to visit our Blog
Click here to Subscribe to our Newsletter
Introduction
Good Morning to all our current and new viewers. Today's article visits several topics such as the Federal Reserve's decision to increase interest rates, inflation figures and implications, Bank of England rate hike, and gold prices.
Federal Reserve
- All eyes will be on the Federal Reserve this Wednesday (16th March 2022) as investors expect policymakers to raise the benchmark interest rate by 0.25% (0.25% to 0.50%). The rate hike is said to be the first time since 2018.
- The reduction in consumption and slowing of the labour market could reduce some inflation pressure over time. However, if higher gas costs and increased price pressures persist, policymakers could convince consumers that the price hikes will last. Consumer behavioural patterns may change permanently to readily accept price increases and request higher rates to combat such issues.
- Fed Chairman Jerome Powell has indicated that the central bank will approach interest rate adjustments carefully as they learn more about the implications of the Ukraine war.
- Russia-Ukraine war has created market turmoil, sending commodity prices soaring. Oil prices have roughly increased by 23% since the invasion. Brent crude oil prices on Friday was at $112/barrel, with its high at $139/barrel.
Inflation
- Last week's Consumer Price Index (CPI) report indicated a rise of 7.9% in inflation, the fastest annual inflation pace in 40 years. The Bureau of Labour Statistics suggests that the main contributors to inflation are rising food, rent and gas prices.
- Officials expect the CPI report to increase further for March as gas prices surge. Rising costs have impacted consumers significantly, causing confidence to fall and affecting household budgets. Despite higher employment figures, increased wages and savings during the pandemic, many low-income households are affected considerably as a large percentage of their income is used on daily necessities.
- President Biden is aware of combating rapid inflation in troubled times. The president has pointed fingers at Russia's President Vladimir Putin, blaming the cause of inflation due to his decision to invade Ukraine.
- Mr Biden is confident that the sanctions placed on Russia have a more significant effect on Russians' costs than Americans.
Bank of England
- How will the BOE respond to the Russia-Ukraine conflict? Investors have expected the BOE to raise interest rates for the 3rd time this week since the pandemic.
- UK inflation rate hit a 30-year high at 5.5% in January, well before the impact of higher oil prices and Western sanctions on Russia.
- The BOE believes that the rate hikes are warranted to reduce the risk of higher inflation that can have detrimental effects in the long term if left uncontrolled.
Gold
- Global financial markets have been experiencing extreme volatility since the invasion of Ukraine. Many investors are turning to the traditional asset of gold as a safe haven.
- Gold prices last week soared to nearly $2,070/ounce, within proximity to its all-time high of 2,072.50 (August 2020). However, gold retreated to below $2,000/ounce despite the further tensions in Ukraine. Many investors are questioning the longevity of the precious metal rally.
- The loss of traction in gold could be connected to the increased hopes of a ceasefire between Russia and Ukraine and easing differences between China and the United States.
- Exchange-Traded Fund (ETF) managers bought heavily into gold as prices rose. The demand for Gold ETFs saw investors adding 96.2 tonnes to their total holdings with a total cost of more than $6.1billion as of 9th March.
- Goldman Sachs has raised its gold price forecast of the commodity to $2,500 over the next six months from its previous of $2,050. Goldman expects that demand for gold will increase throughout the year, mainly from ETF investors, consumers in Asia and central banks.
Source
FX Street
Financial Times
New York Times
Reuters
Yahoo Finance
Weekly Gold Investment Series Guide
Checkout our blog weekly or subscribe to our newsletter for the latest Gold Investment Guides
Click here to visit our Blog
Click here to Subscribe to our Newsletter
Introduction
A warm welcome to all our current and new viewers. Our mid-week article provides insights to the recent events that have taken place between Russia & Ukraine and the announcement of the Federal Reserve to begin its interest rate hike.
Russia-Ukraine News Highlights
- For the first time during the invasion, Russia's Defence Ministry has confirmed substantial casualties in Ukraine; 498 Russian troops have been killed, with at least 1,597 injured.
- The announcement sheds new light on Russia's activities. Up to this point, Russia's military reports have been focused on tallies of destroyed Ukrainian outposts, weapons and equipment as the Russian government cracks down on the portrayal of its actions in Ukraine as a "war" or "invasion.
- Russian media outlets are currently facing fines and blockages for using words such as "war" or invasion". Meanwhile, thousands of Russian anti-war protestors have been detained since the beginning of the conflict.
- Monday's talks between Ukraine and Russia has resulted in zero breakthroughs. The latest reports suggest that the second round of negotiations due Thursday will be near the border between Belarus and Poland.
- Russian Foreign Minister, Sergey Lavrov, indicates that Russia is prepared for the second round of negotiations that discusses its security guarantees with Ukraine.
- On Wednesday, UN General Assembly voted to condemn Russia for its hostile actions against Ukraine and demanded that a ceasefire end the war. Analysts at (WSJ) Wall Street Journal believe that the vote is simply a symbolic gesture and will not result in stopping Russian President Vladimir Putin and his supporters from stopping the invasion.
Federal Reserve Rate Hike
- Federal Reserve Chairman Jerome Powell has indicated in his statement on Wednesday that the central bank is on track to raising interest rates beginning this month.
- The interest rate hike is expected to be a quarter percentage point to combat all-time high inflation in nearly 40 years. The Fed has taken a cautious approach towards implementing the rate hike due to the uncertainty that Russia & Ukraine has played towards the global economy.
- Powell said that "the economics of these events are highly uncertain". "We have seen energy prices move up further, and those increases will continue to go through the economy and push up inflation".
Federal Reserve Nomination
- President Biden's nomination of three new members of the central bank governing board has been stalled by the Senate Banking Committee. Biden's nominee to be the Fed's top bank regulator, Sarah Bloom Raskin, faces backlash over her views on how finance should protect climate change and her preference for stricter regulation.
- The crux of the issue is Miss Raskin's ties to the board of a financial technology company that, through her central bank connections, aided the company in gaining access to a lucrative Fed account in 2018.
- The boycott of Miss Raskin has resulted in the prevention of President Biden's other candidates from advancing, including the renomination of Fed chairman Jerome Powell.
- However, the White House continues to show its support for Miss Raskin. Administration spokesman Michael Gwin has stated that Miss Raksin has "earned widespread support in the face of an unprecedented, baseless campaign that seeks to tarnish her distinguished career in public service and her commitment to upholding the highest ethical standards any administration has ever put forward".
- Ethics experts indicate that the controversy around her nomination could be uncomfortable for Democrats trying to prevent regulators from leaving the government to advise companies they have once policed.
- Meredith McGehee, a Washington ethics expert, has said that Republicans pursue this kind of behaviour all the time as they are seen as party of business.
Gold Performance
- Gold prices loom around $1,930/ounce as investors await Thursday's negotiations between Russia & Ukraine.
- Analysts at FX Street infers that investors expect Russia to engage in a truce as its economy is battered with sanctions from Western leaders.
- The fierce resistance of the Ukrainian military to Russian troops has brought upon a failed risk-off impulse among gold investors despite the US dollar strength.
Source
FX Street
National Public Radio
National Public Radio
New York Times
Wall Street Journal
Weekly Gold Investment Series Guide
Checkout our blog weekly or subscribe to our newsletter for the latest Gold Investment Guides
Click here to visit our Blog
Click here to Subscribe to our Newsletter
Introduction
A warm welcome to all our current and new viewers. Today's articles is a follow up on the past few articles regarding the tensions between Russia and Ukraine.
Russia-Ukraine
- Ukrainian President Volodymyr Zelensky has stated that Russia could start its attack on Ukraine any day now.
- Late-night Wednesday, President Zelensky has failed to contact Russian President Vladimir Putin.
- Russia has amassed nearly 200,000 troops and several thousand combat vehicles near the Ukrainian borders.
- President Zelensky has indicated that his country is prepared for an all-out war with Russia, vowing, "if Russia attacks, if they try to our country, our freedom, our lives, the lives of our children, we will be defending ourselves". The President has made an emotional plea to Russia to reject an attack. Zelensky has stated that Russians are being lied to about Ukraine.
- Ukraine has issued a state of emergency and advised its citizens living in Russia to return home.
- On the other hand, Russia has issued a civil aviating notice warning indicating the closure of all eastern Ukrainian airspace on the border with Russia.
CyberAttack
- A Ukrainian minister has told Interfax-Ukraine news outlet that the country's health, security, and foreign ministries have been taken offline due to a denial of service (DDOS) attack.
- A DDOS attack is designed to overwhelm websites by flooding the network with fake traffic and preventing regular communication.
United Nations Security Council
- The UNSC will hold an emergency meeting to discuss the Russia-Ukraine situation.
- Council diplomats are finalising a draft resolution that suggests Russia violates the UN Charter, international law, a 2015 council resolution endorsing the Minsk agreements to restore peace in eastern Ukraine.
Gold
- Spot Gold high's on Tuesday (23rd February) was at $1,914/ounce. The uncertainty in the marketplace has yet to reach ceilings as the tensions between Russia and Ukraine escalate.
- The economy is preparing for high inflation as additional sanctions are imposed on Russia. Investors' lack of confidence in tensions dissolving between Russia and Ukraine has kept them on their toes. Many investors have sought gold as a safe guard against turmoil.
Sources
BBC
Business Standard
FX Street
Weekly Gold Investment Series Guide
Checkout our blog weekly or subscribe to our newsletter for the latest Gold Investment Guides
Click here to visit our Blog
Click here to Subscribe to our Newsletter
Introduction
Welcome to our mid-week news highlights. Our article today focuses on Russian sanctions & the raising oil prices that is of concern.
Russia-Ukraine
- Earlier on Tuesday (22nd February), the US and its European counterparts have announced a wide range of sanctions against Russia. The move to sanctions came after Russian President Vladimir Putin's decision to recognise self-declared separatist republics in the Donbas region of eastern Ukraine.
- After a unanimous decision in the Federation Council, Putin has announced to deploy "peacekeepers" to the breakaway regions and potentially into other parts of Ukraine. Valentina Matviyenko, an upper house speaker, indicates that peace-keeping forces are designed to maintain peace and stability in the self-proclaimed east Ukrainian republics.
- US President Biden has unveiled two crucial sanctions targetting Russia's largest financial institution, VEB and its military bank and Russian elites and their family members. The sanctions are said to prevent Russia from accessing US capital and financial markets. Biden states, "Russia can no longer raise money from the west and cannot trade in its new debt on our markets or European markets". Germany has played its role of sanctions in announcing the halting of the Nord Stream 2 gas pipeline certification from Russia. Germany is Russia's largest customer for natural gas. Ukrainian Foreign Minister Dmytro Kuleba hails Germany for swift action.
- Ukrainian President Voloydymyr Zelensky has recalled its contract military personnel to active duty and mobilises members of the newly created territorial defence brigades for exercises.
Oil Prices
- On Tuesday, oil prices neared $100/barrel after Russian President Putin ordered its troops into eastern Ukraine.
- The international crude oil benchmark Brent rose as high as $99.50/barrel, an all-time high since 2014. Oil traders weighed in the possibility of a supply chain disruption from Russia.
- As Germany moves to halt the approval on the Nord Stream 2 gas pipeline, prices shot up.
Gold Prices
- Spot Gold price indicates consolidation above $1,900/ounce as Russia - Ukraine tensions escalate.
- Traders are concerned about a full-scale invasion by the Russian military into Ukraine.
- Analysts at FX Street infer that gold prices will remain underpinned this week as tensions between Russia and Ukraine are escalating.
Sources
Wall Street Journal
Financial Times
Al-Jazeera
Reuters
Financial Times
FX Street
Weekly Gold Investment Series Guide
Checkout our blog weekly or subscribe to our newsletter for the latest Gold Investment Guides
Click here to visit our Blog
Click here to Subscribe to our Newsletter
Introduction
Welcome to our mid-week news highlights. Our article today focuses on the de-escalation of Russia and Ukraine and Federal Reserve proposed nominees.
Russia-Ukraine
- Russa-Ukraine tensions call for de-escalation. President Vladimir Putin has stated that he is "ready to work further" with the West on security issues to de-escalate tensions over Ukraine. He has indicated that the West needs to meet Russia's main demands.
- President Biden, however, has cautioned that despite diplomatic resolutions taking place, Russia remains in a "threatening position".
- Biden's campaign has threatened Russia with economic sanctions in the event of an invasion.
- On Tuesday, Russia's defence ministry mentioned that some of the troops near Ukraine had completed their tasks and were heading back to their bases.
- Rob Lee, an expert on the Russian military, has indicated that the West should remain cautious in its approach with Russia. History has seen Russia employ similar tactics only to leave weapons and equipment behind for easy redeployment.
Gold
- Gold prices pull back as de-escalation talks are underway. Prices on Wednesday morning (16th February 2022) has fallen to $ 1,853/ounce.
- Headlines of news have suggested that the retreat of Russian troops from the borders could be the catalyst needed to shift the market's mood.
Federal Reserve
- Senate Republicans have blocked a committee vote on Tuesday on five of Biden's nominees for the Federal Reserve board.
- The delayed nominations include current Fed chairman Jerome Powell, Lael Brainard as the vice-chairman, economists Lisa Cook and Phillip Jefferson as the Federal governors.
- The tactic employed was aimed at the fifth nominee, Sarah Bloom Raskin, Biden's pick for the Federal top banking regulator.
- Miss Raskin has drawn opposition from Republicans for arguing that financial regulators should be considerate of the risks of climate change.
- Senate Republicans are concerned that Miss Raskin may have improperly used her connections with the Federal Reserve to gain access to a central bank master account for Reserve Trust, a financial technology company she served on the board of directors.
- The master account provides access to the Fed's payment systems. Senator Pat Toomey, the top Republican on the Banking Committee, has said that he and his colleagues are prepared to vote on the other four candidates. However, the vote on Miss Raskin should be on hold.
- Senator Toomey has warned the Fed board that the appointment of Raskin would choke off credit to fossil fuel companies. Raskin has mentioned to lawmakers during the confirmation hearing that the decision is made by banks and not the Federal Reserve to decide which companies they would loan money to.
Sources
Al-Jazeera
New York Times
FX Street
NPR
Weekly Gold Investment Series Guide
Checkout our blog weekly or subscribe to our newsletter for the latest Gold Investment Guides
Click here to visit our Blog
Click here to Subscribe to our Newsletter
