According to reports, following the overnight halt of North-South high-level talks originally scheduled for Wednesday, North Korea’s vice foreign minister recently stated that if the United States requires North Korea to abandon its nuclear program, it will be necessary to reconsider the June-North Korea summit. The U.S. and South Korean military jointly stated that the aerial exercise will proceed as planned. In addition, Bloomberg quoted U.S. government officials as saying that White House trade adviser Navarro had been excluded from the consultations with U.S. Chinese economic representatives on May 17th, U.S. time. On Wednesday (May 16), the gold futures price settled at 1290.1 US dollars per ounce, and the silver futures closed up 0.71% at US$16.39 per ounce. The overnight US index hit a five-month high and the 10-year US Treasury yield reached a new high since July 2011, rising to 3.1%. Strong US dollar and U.S. debt still pose a lot of pressure on gold.
The U.S. and South Korean military have jointly voiced the U.S.-North Korea summit and feared that the wave of short-term reparation will trigger a rebound in the price of gold. /b>
As a result of short covering, spot gold Wednesday (May 16) rebounded from a four-and-a-half month low and COMEX gold futures contract closed at $1290.1/oz; silver The main futures contract closed up 0.71% at $16.39 per ounce. The overnight US index hit a five-month high and the 10-year US Treasury yield reached a new high since July 2011, rising to 3.1%. Strong US dollar and U.S. debt still pose a lot of pressure on gold.
In terms of data, US data released during the day showed mixed performance, new housing starts were less than expected, and construction permits were granted. And industrial output was higher than expected. However, the US dollar index maintained its upward trend on Wednesday, climbing to 93.65 earlier and further approaching the 94 mark, due to higher US Treasury yields and the latest Fed officials' speech to release the hawkish signal.
In 2018, the FOMC and the Atlanta Fed President Bostik said that it is correct to confirm interest rate hikes for 2-4 times this year and raise the estimated GDP growth rate to 2.4-2.5% this year. He said that after the additional fiscal stimulus measures, he now supports three increases in interest rates this year. Overnight Fed "Newcomer" - Vice President Nominee Selected PersonsIn the hearing, Larida expressed support for the normalization of interest rates, and also hinted that the pace of Fed rate hike may be faster.
The relatively stable U.S. economic data and comments by Fed officials have prompted the market to rekindle hopes of raising interest rates in June and raising interest rates four times this year. According to CME's FedWatch tool, the Fed's fourth interest rate increase this year exceeded the 50% for the first time.
However, the German Commercial Bank issued an article on Wednesday saying that the downward potential of gold is limited, because futures market speculators have cut net long positions since the summer, so this form of selling pressure should be reduced. At the same time, low price levels should stimulate physical buying interest, especially considering some geopolitical tensions.
Near the close of US stocks, Bloomberg quoted U.S. government officials as saying that Navalo, the White House trade adviser, had been excluded from the consultation with U.S. Chinese economic representatives on May 17th, U.S. time. Navarro has been a staunch supporter of trade protectionism in the White House. He is also regarded as the most important leader behind Trump’s round of tariffs.
According to the “Wall Street Journal”, some members of the Senate’s minority leader Schumer and Republican Rubio questioned Trump, arguing that his softening of ZTE’s attitude is contrary to U.S. priority commitments. It is stated that "national security must not be used as a bargaining chip in trade negotiations." However, Kudrow, the White House’s chief economic adviser, said on Tuesday that Trump’s willingness to rethink the punitive measures on ZTE indicated that even when national security seeks to reach a trade agreement with China, it will serve the Sino-U.S. negotiations. This may reflect the serious differences within the White House on China's trade issues.
In addition, the situation in North Korea is changing and the uncertainties surrounding the prospects of the summit between the United States and North Korea are also causing widespread concern in the market. According to the People's Daily, following the overnight halt of North-South high-level talks originally scheduled for Wednesday, North Korea’s vice foreign minister recently stated that if the United States requires North Korea to abandon its nuclear program, it is necessary to reconsider the North Korea-North Korea summit meeting in June. At present, U.S. officials have not yet formally responded. Progress in the short term will have a certain impact on the gold market.