Gold Price Futures (GC) Technical Analysis – Yields Rise on Strong Retail Sales Data, Pressuring Gold Prices

Gold futures are edging higher on Tuesday, helped by a weaker U.S. Dollar, but capped by rising Treasury yields. Well, how can that be? The best explanation is safe-haven buyers drove the dollar beyond its fair value area, meaning it’s overbought and has to come down.

Essentially, the dollar is currently being driven lower by safe-haven liquidation. But Treasury yields are being driven higher by the strong U.S. retail sales report.

At 13:18 GMT, June Comex gold futures are trading $1825.30, up $11.30 or +0.62%. The SPDR Gold Shares ETF (GLD) is at $170.34, up $1.55 or +0.92%.

Just last week, investors were seeking protection in the safe-haven Treasury bonds and the U.S. Dollar in anticipation of a slowdown in the economy caused by the Fed’s aggressive interest rates. Today’s retail sales report shows that the U.S. consumer is still buying despite inflation hovering near a 40-year high.

This supports the Fed’s plans to hike rates by 50 basis points in June and July. That’s bearish for gold. The rate hikes have already been priced into the dollar so now safe-haven longs are bailing on the dollar because the retail sales report is a sign of strength for the economy. That’s helping to underpin gold.

Daily June Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher following the confirmation of Monday’s closing price reversal bottom.

A trade through $1910.70 will change the main trend to up. A move through $1785.00 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The minor range is $1910.70 to $1785.00. Its 50% level at $1847.90 is the next upside target and potential resistance.

Daily Swing Chart Technical Forecast

The direction of the June Comex gold futures contract into the close on Tuesday will be determined by trader reaction to $1822.90.

Bullish Scenario

A sustained move over $1822.90 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for a surge into the pivot at $1847.90.

Bearish Scenario

A sustained move under $1822.90 will signal the presence of sellers. The first downside target is a minor pivot at $1809.90.

Aggressive counter-trend buyers could come in on the first test of $1809.90. They will be trying to form a potentially bullish secondary higher bottom. Taking out this level, however, could trigger an acceleration into the support cluster at $1785.00 – $1783.80.

For a look at all of today’s economic events, check out our economic calendar.

Factbox-Companies sell their businesses in Russia

(Reuters) -Some Western companies have agreed to sell their Russian assets or hand them over to local managers as they scramble to comply with sanctions over the Ukraine conflict and deal with threats from the Kremlin that foreign-owned assets may be seized.

The moves, part of a broader corporate exodus from the country, are likely to stir concerns that Russian firms and institutions are snapping up prized assets for a bargain.

Below is a list of firms by sector that have secured deals to sell their businesses in Russia:

AUTOMAKERS

INCHCAPE

The British car distributor said it had agreed to sell its Russian business to local management. The sale will result in an exceptional non-cash loss before tax of about 240 million pounds ($299 million).

RENAULT The French carmaker said on May 16 it will sell its majority stake in Russia’s biggest carmaker, Avtovaz, to the Russian Central Research and Development Automobile and Engine Institute (Nami), with a six-year option to buy back the stake.

Renault also said that 100% of the shares in Renault Russia will go to the city of Moscow.

Russia had said on April 27 that Renault would transfer its 67.69% stake in Avtovaz to the institute for the symbolic sum of one rouble.

BANKS

PPF

The Czech investment group has agreed to sell its Russian banking assets to a group of investors, PPF said on May 17.

PPF’s consumer lender, the Home Credit and Finance Bank, and its subsidiaries will be acquired by investors led by Ivan Tyryshkin, PPF said, without giving the price or other details of the transaction.

SOCIETE GENERALE The French bank expects to close the sale of its Rosbank unit to Russia’s Interros Capital “in the coming weeks,” it said on May 5.

It announced the sale on April 11, adding it would write off 3.1 billion euros ($3.6 billion), comprising a 2 billion-euro hit on Rosbank’s book value and the rest linked to the reversal of rouble conversion reserves.

ELECTRICAL COMPONENTS & EQUIPMENT

SCHNEIDER ELECTRIC

The French electrical equipment maker will sell its operations in Russia and Belarus to local management, the company said on April 27, as it signed a letter of intent with the designated buyers.

It will write off up to 300 million euros ($314 million) of net book value and make a non-cash reversal of currency translation estimated at 120 million euros.

ENERGY

SHELL

The British energy and petrochemical giant will sell its Russian retail and lubricants business to Russia’s Lukoil, the companies said on May 12. The deal includes 411 retail stations and the Torzhok lubricants blending plant. Shell would not comment on the value of the deal.

FOOD & BEVERAGES

AB INBEV

The Dutch brewer said on April 22 it would sell its non-controlling stake in its Russian joint venture AB InBev Efes. The divestiture will result in a $1.1 billion impairment charge in the first quarter. The joint venture has 11 breweries in Russia and three in Ukraine.

ATRIA

The Finnish food processing company said on May 16 it sold its fast food business in Russia, Sibylla Rus, to Russian meat producer Cherkizovo for about 8 million euros ($8.4 million).

FAZER

The Finnish bakery and food service company said on April 29 it had agreed to sell its Russian unit to Moscow’s Kolomenskij Bakery and Confectionery Holding. Fazer did not disclose the value of the transaction.

MCDONALD’S CORP

The American fast food giant said on May 16 it had initiated a process to sell its business in Russia after 30 years of operating its restaurants in the country. McDonald’s expects to record a mostly non-cash charge of about $1.2 billion to $1.4 billion.

PAULIG

The privately owned Finnish food and drink company said on May 5 it had sold its operations in Russia to private Indian investor Vikas Soi, after being mentioned by Russian authorities as an example of a foreign company that could be nationalised.

It said the divesture includes the Paulig Rus LLC unit and Paulig’s operations, as well as its coffee roastery in Tver, but not the Paulig brand, which will be phased out in Russia over the coming months.

RAISIO

The Finnish food processing company said on April 29 it had agreed to sell its consumer business in Russia to Copacker Agro Ltd for about 1.5 million euros ($1.6 million). As a result of the sale, Raisio said it would recognise an estimated impairment loss of 2.9 million euros in its Q1 earnings before interest and taxes.

VALIO

The Finnish dairy producer has sold its Russian business to GK Velkom, the company said on April 26, following an earlier threat by Russian authorities to nationalise its business there. Valio said the transaction would take effect immediately but gave no financial value for it.

MINING

AMUR MINERALS CORP

The London-listed Russian mining company announced on May 9 it proposed to sell its main Kun-Manie project for $105 million and agreed to assign to buyer benefit of all loans owed by Kun-Manie to Amur in consideration for $30 million.

KINROSS

Kinross Gold Corp is selling its Russian assets to the Highland Gold Mining group of companies for a total of $680 million in cash, the Canadian gold miner said on April 5, nearly a month after suspending its operations in the country.

OTHERS

AUTHENTIC BRANDS GROUP

Turkish shoe retailer FLO Magazacilik is in talks to buy more than 100 stores owned by fitness brand Reebok in Russia, which is part of the Authentic Brands Group, FLO Chairman Mehmet Ziylan said on May 16. Ziylan added a deal had not been finalised.

BRUNEL INTERNATIONAL

The Dutch employment services company is in the process of selling activities in Russia to local management, it said on April 29, adding its net investment in the country at end-March was 14 million euros ($14.7 million).

FLUGGER GROUP

The Danish paint maker said on April 8 it had initiated the sale of its Russian and Belarusian companies, taking a 115 million Danish crowns ($16.2 million) write-down.

IMPERIAL BRANDS

The British tobacco group said on May 17 that the terms of its agreement to exit Russia did not include a clause allowing it to buy back its business there in future.

Imperial Brands had announced the transfer of its Russian business to “investors based in Russia” on April 20, following talks with an unidentified third party in March.

MAERSK

The Danish shipping company has found possible buyers for its 30.75% stake in Global Ports Investments, which operates ports in Russia, it said on May 4.

STORA ENSO

The Finnish forestry firm has completed its exit from Russia with the sale of three corrugated packaging plants to local management, it said on May 16.

At the end of April, Stora said it had agreed to sell its two sawmills and their forest operations in Russia to local management, causing it to record a 130 million euro ($136 million) loss.

YIT

The Finnish builder has signed an agreement with Etalon Group PLC for the sale of its operations in Russia for about 50 million euros ($52 million). As a result of the sale, YIT said it would book an impairment of about 150 million euros in its first quarter income statement.

($1 = 0.8022 pounds)

($1 = 0.9546 euros)

($1 = 7.1002 Danish crowns)

(Compiled by Elena Vardon, Augustin Turpin, Enrico Sciacovelli, Ina Kreuz; Editing by Mark Potter, Jan Harvey, Andrew Heavens and Susan Fenton)

Peru mining protests risk clogging $53 billion investment pipeline, industry warns

By Marco Aquino

LIMA (Reuters) – Peru, the world’s second-largest copper producer, risks losing out on billions of dollars of mining investment if the government fails to defuse protests that are hitting the industry and denting production, analysts and executives said.

Social conflicts have risen in the Andean nation over the past year since socialist President Pedro Castillo came into office, with a spate of protests against mines, including one that has halted production at the huge Las Bambas copper deposit.

With global prices soaring on high demand, that now threatens a mining investment pipeline of some $53 billion and could stall future projects expected by investment bank RBC to make up 12% of the world’s copper supply in years to come.

“Without any world-class projects on the horizon, the prospects for sustaining production are not good,” said Gonzalo Tamayo, analyst at Macroconsult and a former Peruvian mines and energy minister.

Mining executives and analyst met last week in Peru’s capital Lima, where the main concern was falling investment tied to rising social protests. A central bank report shows investment dipping some 1% this year and 15% in 2023.

The conflicts, mainly in poor Andean areas where communities feel bypassed by the huge mineral wealth beneath their soils, have started to bite, with protesters emboldened under Castillo who won election pledging to redistribute mining wealth.

Southern Copper’s Cuajone mine was paralyzed for almost two months earlier this year.

Las Bambas, owned by China’s MMG Ltd, suspended operations in April after an invasion of the mine by communities demanding what they called ancestral lands. The mine, which produces 2% of the world’s copper output, remains offline.

Las Bambas had received government approval in March to expand the mine, a plan which is now under threat.

Álvaro Ossio, vice president of commercial and finance for ​​Las Bambas, said in a presentation at the Lima event, that the country faces a big task to benefit from high global prices.

“The great challenge that remains for all Peruvians is to take advantage of this great opportunity in these future trends,” he said.

Peru’s last big mining investments were in Anglo American’s Quellaveco and Minsur’s Mina Justa of a combined $6.6 billion. Their operations starting this year will help Peru hit annual output of 3 million tonnes of copper by 2025, experts say.

However, other major projects like Southern Copper’s Tia María, Michiquillay and Los Chancas worth some $6.7 billion, Buenaventura’s near billion dollar Trapiche and Rio Tinto’s $5 billion La Granja remain up in the air.

Not all was downbeat, however.

The world’s largest gold miner, Newmont Mining, said at the event that it was considering expanding into copper production in Peru, with a potential future return to the canceled Conga project.

Analyst Tamayo, though, stressed recent protests against mining had become harder to resolve.

“Now there are protests that stop mines in full operation,” he said. “The mining firms feel that the State does not support them and that the State has ceased to be the arbiter in conflicts.”

(Reporting by Marco Aquino; Editing by Adam Jourdan and Richard Pullin)

Daily Gold News: Tuesday, May 17 – Gold Bounces From the $1,800 Level

Gold Price Recap

The gold futures contract gained 0.32% on Monday, May 16, as it fluctuated following its recent declines. The market reached the new local low of $1,785.00, but it closed above the $1,800 level again. Gold retraced almost all of the February-March rally on strengthening U.S. dollar, Fed’s monetary policy tightening fears. It went back to the $1,800 level where it’s been fluctuating for months in 2021. This morning yellow metal is trading higher following U.S. dollar weakness, as we can see on the daily chart (the chart includes today’s intraday data):

Precious Metals Price Action

Gold is 0.2% higher this morning after bouncing from the $1,800 price level. It is trading along its recent daily highs. What about the other precious metals? Silver is 0.5% higher, platinum is 1.1% higher and palladium is 0.1% lower. So the main precious metals’ prices are higher this morning.

Fundamentals and Economic News Schedule

Yesterday’s Empire State Manufacturing Index release has been worse than expected at -11.6 (exp. 15.3). Today we will get the important Retail Sales release at 8:30 a.m., Industrial Production release at 8:15 a.m. and the Fed Chair Powell’s speech at 2:00 p.m., among others.

The markets will still continue to react to the ongoing Russia-Ukraine war news.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for the next two trading days.

Tuesday, May 17

  • 8:00 a.m. U.S. – FOMC Member Bullard Speech
  • 8:30 a.m. U.S. – Retail Sales m/m, Core Retail Sales m/m
  • 9:15 a.m. U.S. – Industrial Production m/m, Capacity Utilization Rate
  • 10:00 a.m. U.S. – Business Inventories m/m, NAHB Housing Market Index
  • 1:00 p.m. Eurozone – ECB President Lagarde Speech
  • 2:30 p.m. U.S. – Fed Chair Powell Speech
  • 2:30 p.m. U.S. – FOMC Member Mester Speech

Wednesday, May 18

  • 8:30 a.m. U.S. – Housing Starts, Building Permits
  • 8:30 a.m. Canada – CPI m/m
  • 9:30 p.m. Australia – Employment Change, Unemployment Rate
  • Tentative, Eurozone – ECB Financial Stability Review

For a look at all of today’s economic events, check out our economic calendar.

Paul Rejczak
Stock Trading Strategist
Sunshine Profits: Analysis. Care. Profits.

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Bankers brush off concerns about Brazil’s polarized election

By Tatiana Bautzer

NEW YORK (Reuters) – On one side is a president questioning the integrity of the electoral system. On the other, a challenger warning he could roll back the country’s biggest privatization in decades.

But investment bankers are sanguine about the impact of Brazil’s presidential election this year on investor appetite for upcoming deals.

They say investor attention is focused on global risks such as higher U.S. interest rates and inflation or the war in Ukraine, executives say, making a presidential contest between two familiar faces seem like a manageable concern.

“Given the global outlook, Brazil represents an attractive opportunity for investors as a global commodity provider, likely overriding any potential short term political uncertainty,” said Max Ritter, managing director at Goldman Sachs & Co responsible for Latin America.

Former President Luiz Inacio Lula da Silva has stuck to proven left-wing rhetoric while riding a healthy lead in the polls. However, bankers see his choice of centrist former Sao Paulo Governor Geraldo Alckmin as a nod toward the market-friendly policies he adopted on taking office in 2003.

Ricardo Lacerda, founder and CEO of Brazilian investment bank BR Partners, acknowledged the risk that far-right President Jair Bolsonaro and his supporters could challenge the election result, after casting doubts on Brazil’s electronic voting system.

But he said interest in mergers and acquisitions remains strong in Brazil, even as appetite for new share offerings has waned.

“Some investors are looking at Brazil again after the sharp interest rates hikes boosted the real,” Lacerda said.

The head of Latin America at Citigroup, Eduardo Cruz, said there may be a window for renewed share issues by the end of the year, although he expects mostly listed companies selling new stock rather than a new wave of initial public offerings.

Even the bankers on a deal publicly criticized by Lula say there is little sign of cold feet.

Bolsonaro’s government is racing to privatize state power company Centrais Eletricas Brasileiras SA, or Eletrobras, with a share sale diluting the government’s stake and raising more than $6 billion before the October election.

Lula has warned “serious business leaders” to steer clear of the deal, telling supporters at a rally that buyers taking part in privatizations under Bolsonaro “will have to talk to us.”

Three bankers involved in the Eletrobras deal, who requested anonymity to speak freely, said they continue to see strong interest in Eletrobras among foreign investors. They called the comments from Lula overheated campaign rhetoric.

“There are not many assets available worldwide with a strong upside potential as Eletrobras after the privatization”, one of them said.

(Reporting by Tatiana Bautzer; Editing by Brad Haynes and Stephen Coates)

World’s Biggest Bitcoin Holder Grayscale Launches ETF in Europe

Key Insights:

  • Grayscale announced the Future of Finance UCITS ETF yesterday.
  • The ETF will be listed on three exchanges and passported for sale across Europe.
  • Institutional investors have been pretty interested in Bitcoin recently.

In an announcement today, the world’s largest digital currency asset manager, Grayscale, confirmed that it would be bringing its first European ETF called the Grayscale Future of Finance UCITS ETF (GFOF).

Europe Gets a Slice of Grayscale

The launch of the ETF is coming right after the crypto market witnessed one of the worst crashes in its history, which even took Bitcoin below $30k at one point.

However, unlike Grayscale’s other ETFs that track a cryptocurrency asset, the GFOF ETF will be tracking the investment performance of the Bloomberg Grayscale Future of Finance Index.

This index comprises of companies from three sections of the industry – Financial Foundations, Technology Solutions, and Digital Asset Infrastructure.

Set to be listed on three exchanges initially, the GFOF will be available on the London Stock Exchange (LSE), Borsa Italiana, and Deutsche Börse Xetra.

Commenting on the launch, the CEO of Grayscale Investments, Michael Sonnenshein, stated,

“With growing global demand from both institutional and individual investors for Grayscale products, we’re thrilled to be expanding our offering in Europe through the UCITS wrapper. This product draws upon our historical strengths, while furthering our evolution as an asset manager that helps investors build portfolios that can stand the test of time. GFOF UCITS ETF is the natural next step in our global strategic journey.”

The Right Time To Jump In?

The overall condition of the market worsened significantly earlier this week after the market crashed and lost $500+ billion. Since then, the king coin has been making some recovery rising by 8.23% in the span of 3 days.

Even at the time of writing, BTC has increased by 2.3% and is trading at $30.8k.

Bitcoin recovered by 8% and is currently trading at $30k

Incidentally, this crash was a golden opportunity for institutional investors who bought almost $300 million worth of Bitcoin this week from the market-wide sell-off.

Up until the market bottomed, mostly this cohort of investors was focused on dumping their holdings, but that changed after almost every asset fell by a significant margin after May 9.

CoinShares weekly net flows registered $247 million in inflows

But Grayscale’s flagship Grayscale Bitcoin Trust ETF (GBTC), on the other hand, is not noticing as much interest from investors since the ETF is losing demand with the growing bearishness in the market.

Trading at a discount of 31.38%, GBTC is at its lowest point since February 2020.

GBTC is trading at a 31% discount

Shares recover even as growth, inflation fears linger

By Lawrence White

LONDON (Reuters) – Global shares recovered on Tuesday on optimism about an easing of China’s crackdowns on tech and COVID-19, but concerns about rising prices and slowing growth worldwide set a nervy tone elsewhere in markets.

European shares followed up a positive start in Asia, with the STOXX index of Europe’s 600 biggest stocks up 1.7% and U.S. stock futures, S&P 500 e-minis, suggesting Wall Street would follow suit.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 2.5%, but the index is still down 16.8% so far this year.

“There was a good session in Asia and, taking the S&P 500 as a guide, the U.S. looks set to be up around 1%…but looking ahead markets remain fixated on inflation and rate hikes,” said Philip Shaw, Chief Economist at Investec in London.

“Headlines are focused on higher inflation pressures either directly stemming from the Ukraine conflict, or supply chain shortages partly coming out of the lockdowns in China,” he said.

There were signs of nervousness in bonds, currencies and commodities as economic growth fears in the world’s two largest economies have re-emerged following weak retail and factory figures in China and disappointing U.S. manufacturing data..

An index compiled by U.S. bank Citi that monitors whether economic data comes in better or worse than economists had been expecting is back in negative territory.

GRAPHIC: Negative surprises https://fingfx.thomsonreuters.com/gfx/mkt/zjpqkgkqlpx/Pasted%20image%201652779321439.png

The New York Fed’s Empire State manufacturing index published on Monday showed an abrupt fall during May and shipments fell at their fastest pace since the beginning of the pandemic.

The yield on benchmark 10-year Treasury notes rose to 2.9185% compared with its Monday U.S. close of 2.879%, while two-year yields, which rise with traders’ expectations of higher Fed fund rates, edged up to 2.6195%.

Investors will look to a slew of central bank policymakers speaking on Tuesday for further signs of the timing of rate hikes to combat inflation.

Those scheduled to speak include U.S. Federal Reserve chair Jerome Powell at 1800 GMT, European Central Bank President Christine Lagarde, and Bank of England Deputy Governor Jon Cunliffe.

Futures markets are pricing consecutive 50 basis point hikes in June and July and for the benchmark U.S. interest rate to reach 2.75% by year end. However there are growing expectations that other central banks will catch up.

CURRENCY JITTERS

Currency and commodity markets were jittery amid profit-taking from investors nervous about the downbeat economic data.

Turkey’s lira fell 2%, its biggest drop since January, as concerns about a global recession fuel selling pressure on the currency.

The U.S. dollar index, which tracks the greenback against a basket of currencies, fell 0.35% to 103.8 as investors cashed out and trimmed bets on U.S. rate hikes driving further gains.

The European single currency was up 0.4% on the day at $1.0475, having lost 0.96% in a month.

Oil hit its highest in seven weeks on Tuesday, supported by the European Union’s ongoing push for a ban on Russian oil imports that would tighten supply and as investors focused on higher demand from an easing of China’s COVID lockdowns.

Brent crude rose as high as $115.14, its highest since March 28, while U.S. West Texas Intermediate (WTI) crude rose 63 cents to $114.84.

Gold prices firmed, as the pullback in the dollar supported demand for greenback-priced bullion and countered pressure from the recovery in U.S. Treasury yields. Spot gold traded up 0.2% at $1,827.44 per ounce. [GOL/]

Bitcoin appeared to have at least temporarily stabilised at $30,295, after days of heavy losses in cryptocurrency markets following the collapse in prices of several leading so-called stablecoins.

CHINA BOOST

Hopes that China might ease two key sets of restrictions had set the positive mood in shares early on Tuesday.

Shanghai achieved the long-awaited milestone of three straight days with no new COVID-19 cases outside quarantine zones, which could lead to the beginning of the lifting of the city’s harsh lockdown.

Meanwhile Chinese Vice-Premier Liu He was scheduled to speak at a meeting on Tuesday with tech executives to promote the development of the digital economy, people familiar with the matter told Reuters.

The meeting is being closely watched for clues as to how far Chinese authorities will go in easing a regulatory crackdown in place since late 2020 on the previously high-flying tech sector.

Mainland China’s CSI300 Index gained 1.25% while Hong Kong’s Hang Seng Index was 3.27% higher, as tech firms listed in the city jumped nearly 6% on hopes of Beijing’s crackdown on the sector being relaxed.

(Additional reporting by Scott Murdoch in Hong Kong; Editing by Lincoln Feast, Kirsten Donovan and Barbara Lewis)

Analysis: Food inflation pain puts emerging markets between rock and hard place

By Karin Strohecker, Ezgi Erkoyun and Sarah El Safty

LONDON/ISTANBUL/CAIRO (Reuters) – Like for millions of people in developing and emerging market countries around the world, shopping for staple foods has turned from a necessity into a luxury for Selcuk Gemici.

The 49-year-old, who works in an auto repair shop in Turkey’s largest city Istanbul and lives with his wife and two children in his father’s house, says fresh produce is often out of reach with his family living on pasta, bulgur and beans.

“Everything became so expensive, we cannot buy and eat what we want – we only buy what we can afford now,” said Gemici. “My children are not properly nourished.”

Global food prices have climbed for two years, fuelled by COVID-19 disruptions and weather woes. Supply shocks to grains and oils from Russia’s invasion of Ukraine saw them hit an all-time record in February, and again in March.

Inflation rates have soared, with energy price rises adding to pressure. Turkey or Argentina with annual inflation of 70% and around 60% might be outliers, but readings are into double-digits in countries from Brazil to Hungary. It makes U.S. inflation at 8.3% look modest in comparison.

Rising food prices are a hot topic in emerging market, raising the risk of civil unrest with echoes of the Arab spring and putting policy makers in a bind between stepping in with fiscal support to ease the pain on their population or preserve government finances.

Food is the single largest category in inflation baskets – the selection of goods used to calculate the cost of living – in many developing nations, accounting for around half in countries like India or Pakistan and on average for some 40% in low-income countries, International Monetary Fund data shows.

Food producers have become more protective: India on the weekend announcing a ban on wheat exports while Indonesia halted exports of palm oil to control soaring prices at home in late April.

Soaring wheat and rising food prices fuel inflation https://fingfx.thomsonreuters.com/gfx/mkt/klvykoeqwvg/Soaring%20wheat%20and%20rising%20food%20prices%20fuel%20inflation.PNG

And with the war in Ukraine not only disrupting food but also fertilizer supplies, food inflation could be more longer-lasting, Marcelo Carvalho, head of global emerging markets research at BNP Paribas told Reuters.

“This is here to stay,” said Carvalho. “Food is very salient – when there is a change in food prices, the perception about inflation is magnified – that feeds into inflation expectations that are more easily unanchored.”

HOT SPOT

For Um Ibrahim, a 60-year-old widow and street vendor selling headscarves in front of a mosque in the middle-class district of Madinet Nasr in Egypt’s capital Cairo, feeding her four children has become much harder.

“All prices rose – clothes, vegetables, poultry, eggs – what am I going do?” she asked, laying out her ware on a cloth.

Egypt, one of the world’s biggest wheat importers, has seen inflation soar more than 13% in April, and is expected to hike interest rates again at a meeting this week after it devalued the currency by 14% in mid-March.

Emerging market policy makers, having jacked up interest rates by hundreds of basis points cumulatively since 2020 to curb price pressures and ensure a bond premium to rising U.S. yields for investors, have to perform a balancing act between taming inflation and keeping fragile growth alive at a time of rising global interest rates.

Emerging economies may expand just 4.6% this year, the World Bank forecasts, compared with an earlier 6.3% prediction.

Emerging market inflation https://fingfx.thomsonreuters.com/gfx/mkt/mopanzmmqva/EM%20inflation%20pressures.PNG

Polina Kurdyavko, head of EM debt at BlueBay Asset Management, says governments have three options: Provide bigger subsidies to consumers or bite the bullet that is to let prices rise and face inflation and social unrest, or do something in between.

“There are no easy solutions,” Kurdyavko said.

A raft of countries have introduced measures: Turkey has raised the minimum wage by 50% in December to address a currency crash and inflation spike. Chile will up minimum pay this year as well.

South Africa’s government is debating whether to increase a social relief grant launched in 2020 and make the scheme permanent.

Economists fear emerging economies are facing a fresh wave of unrest on the back of the latest increases in food prices. North Africa, where food inflation was a contributor to the Arab Spring revolts a decade ago, looked particularly vulnerable, said Beata Javorcic, chief economist at the European Bank for Reconstruction and Development.

“The irony of this war is that while everybody expected Russia to have a crisis, it is actually North African countries that are closer to having an emergency situation due to high food prices,” she said.

But pain is expected to stretch further: Three quarters of nations expected to be at high-risk or extreme risk of civil unrest by the fourth quarter of 2022 were middle-income countries, risk consultancy Verisk Maplecroft said last week.

Appeasing inflation pressures through spending will come at a fiscal cost that could spell trouble further down the line, said BNP’s Carvalho.

“In emerging markets, fiscal sins are forgiven but not forgotten,” he said. “Over the last couple of years, everybody felt like they have a blank cheque … in part because rates were so low. Now that interest rates are rising, it gets a bit trickier.”

(Reporting by Karin Strohecker; Additional reporting by Jorgelina do Rosario; Editing by David Evans)

Rouble reverses rally as Russia eases capital controls

(Reuters) – The Russian rouble weakened on Tuesday, stepping away from near five-year highs against the euro, after the central bank eased some capital controls that were the main driver of its strength in the past few weeks.

The rouble has become the world’s best-performing currency this year despite a full-scale economic crisis, although this is because of artificial support from controls that Russia imposed to shield its financial sector in late February after it sent tens of thousands of troops into Ukraine.

At 0741 GMT, the rouble was 0.7% weaker at 63.89 against the dollar, moving away from the 62.6250 level reached on Friday, its strongest since early February 2020.

Against the euro, the rouble fell 1.1% to 66.50, hovering near its strongest level since mid-2017 of 64.9425 that it touched last week.

The rouble pared gains after the central bank raised the ceiling for cross-border transactions, allowing Russian residents and non-residents from friendly states to channel foreign currency abroad at an amount equivalent to up to $50,000 a month, from the previous limit of $10,000.

The bank’s decision is unlikely to immediately change the balance of power in the market, where export-focused companies are obliged to convert 80% of their revenues as the central bank can not intervene itself after the West froze about half of its gold and foreign exchange reserves.

But the latest move from the central bank can be seen as an indication that the recent phase of the rouble rally could be over soon, BCS Brokerage said.

On the stock market, the dollar-denominated RTS index shed 0.2% to 1,171.6 points, while the rouble-based MOEX Russian index added 0.5% to 2,377.6 points.

Promsvyazbnk analysts said the MOEX index may climb above 2,400 during the day.

For Russian equities guide see

For Russian treasury bonds see

(Reporting by Reuters; Editing by Christian Schmollinger)

US Stock Market Crash: How To Protect Capital And Profit With PrimeXBT?

The Nasdaq is down more than 25% from its highs, demonstrating the carnage across the board in tech stocks. The S&P 500 has also begun to roll over, dropping nearly 20% from record highs. The Dow Jones Industrial Average has held up better but is still down a shocking 15%. The sky seems to be falling in the stock market, so what’s an investor or trader to do?

Fortunately, there are more options and alternatives out there beyond the traditional buy and hold method of making money off the stock market. Many such tools can be used to protect capital during downtrends and turn crashes into profits. Here is how you can protect your capital and profit from stock market madness using PrimeXBT.

Growing Risk Across Global Markets Elevates Volatility

To combat the onset of COVID and the impact of lockdowns on the economy, the United States Federal Reserve began expanding the monetary supply in cooperation with central banks and lowered interest rates, which helped to flood the market with capital. This capital made its way into the stock market, cryptocurrencies like Bitcoin, and other risk assets.

These assets exploded, bringing some of the best gains investors have seen in years. A sharp, V-shaped correction was all that was left behind post-COVID, then a parabolic rally that late last year came to an abrupt end. The very reasons that pumped markets are now the cause for its collapse. The Fed began tightening its monetary policy and raising interest rates for the first time in years. The result was an immediate selloff in anticipation of it all.

Making matters worse, the supply chain is still severely disrupted due to the pandemic, China remains in lockdown, war is waging across Europe, and United States inflation is the worst it has been in more than 40 years. Oil prices and other essential commodities are also skyrocketing. Investors fear the end of the growth cycle in stocks for the next several years or potentially more.

Stock Market Crash And Cryptocurrency Correction Explained

In response to the growing global turmoil and runaway inflation in the United States, the US stock market and its most popular stock indices have taken an extreme beating. No index has suffered worse than the Nasdaq, which represents a basket of top tech stocks from the sector.

The stock market also was brought down further by surrounding bearish sentiment related to the cryptocurrency industry, which was the target of a strategic attack of an algorithm stablecoin in an attempt to crash the market. The attack was a success, and cryptocurrencies, especially altcoins, were obliterated.

No cryptocurrency suffered worse than Terra LUNA, which fell from prices close to $100 per token to under a penny in less than a month. The attack also damaged the peg of stablecoin UST and took the price of Bitcoin to a low of $25,000 per coin.

How PrimeXBT Helps Traders Protect Capital And Profit

How is it possible to protect capital and even profit from the storm when such extraordinary volatility strikes? With the award-winning margin trading tools offered by PrimeXBT, anything is possible. Stop-loss protection would have triggered and prevented any unwanted severe drawdown. A short position could have possibly made the selloff profitable. PrimeXBT provides the complete flexibility of long and short positions using leverage, even simultaneously for hedge positions.

The platform has more than 100 different trading instruments listed, ranging from crypto to stock indices, commodities to forex, and more. All of the major US stock indices mentioned above, such as the Nasdaq, S&P 500, and Dow Jones Industrial Average are available to trade on the same platform as Bitcoin, Ethereum, and other altcoins. Gold, oil, and every other major asset is included.

Even PrimeXBT traders could have profited from the catastrophe in LUNA. As one of the many newer altcoins the platform has recently added, traders who were short LUNA had the opportunity to short it all the way down to zero. Investors in LUNA lost everything, while PrimeXBT traders raked in all the profit.

Prepare For Anything And Everything With PrimeXBT

PrimeXBT also provides other ways to help investors and traders survive markets when things get chaotic. Covesting copy trading lets followers copy the trades of other, more skilled strategy managers who prove their worth via a transparent leaderboard system. Covesting strategy managers have more than 5,000% ROI following the aftermath of the recent stock market and crypto crash, showing that it is very possible to protect capital and even profit substantially during downtrends.

Covesting yield accounts let crypto holders earn passive income through a variable APY on any idle crypto assets. APY rates reach as much as 14% during peak market conditions. This no-stress solution makes connecting to top DeFi platforms as simple as a click, right from within the PrimeXBT account dashboard.

While the damage has been done, it doesn’t need to be this way in the future. The next time volatility strikes, make sure you are registered for a platform that provides you with the tools above. PrimeXBT makes it possible to protect capital and stay profitable, even in the worst situations that markets have seen. Be prepared for anything and everything with PrimeXBT.

Marketmind: Apocalypse now?

A look at the day ahead in markets from Dhara Ranasinghe.

Bank of England boss Andrew Bailey is sorry for an “apocalyptic” view of the world, saying that monetary policy faces its biggest test in 25 years with surging inflation exacerbated by war in Ukraine and China’s COVID lockdowns.

Federal Reserve chief Jerome Powell, who warned last week that taming inflation will “include some pain”, and European Central Bank president Christine Lagarde speak later on Tuesday.

No wonder markets are so volatile — swinging one way one minute on a view that surging inflation will bring aggressive rate hikes in major economies to swinging the other way the next on fears that all this inevitably raises recession risks.

A heavy hint from Australia’s central bank that another rate hike is coming in June is lifting the Aussie dollar today.

But in general, it’s that growing fear of recession risk – heightened by Monday’s gloomy China data – that holds sway. U.S. 10-year Treasury yields are down almost 30 basis points from 3-1/2 year highs hit just over a week ago.

For now stocks markets are stable. Yet, first quarter euro zone GDP numbers, U.S. retail sales and industrial production data later pose a new test for fragile sentiment.

Economists polled by Reuters forecast retail sales rose 0.9% in April versus a 0.5% gain a month earlier.

Data out early on Tuesday shows Britain’s unemployment rate fell to its lowest since 1974 at 3.7% in the first three months of this year, which could bring some comfort to policymakers.

Finally, while sentiment is largely risk off, commodity prices continue to surge — wheat futures and other agricultural goods prices shot up on Monday. No doubt, there’s no shortage of sources of angst right now.

U.S. retail sales https://fingfx.thomsonreuters.com/gfx/mkt/dwvkryxdypm/Pasted%20image%201652306123735.png

(Reporting by Dhara Ranasinghe, editing by Karin Strohecker)

Gold Price Prediction – Gold Prices Fall Sharply as the Dollar Nears Two Decade Highs

Key Insights

  • Gold prices rebound after today’s downward swing.
  • Rate tightening places downward pressure on rate-sensitive sectors. 
  • Treasury yields eased as investors wait for hints about Fed monetary policy.  

Gold prices recovered in volatile trading after hitting multi-week lows as higher yields and a stronger dollar placed downward momentum. The dollar rallies to two-decade highs as investors long the dollar. Benchmark yields pulled back as investors await economic data. The ten-year yield slid by 3 basis points today. 

The Empire State Manufacturing Index came in lower than expected. Investors await this week’s economic data about retail sales for clues about the size of the Fed’s next move. April housing starts will be reported on May 18th, which will signal how rate-sensitive sectors are faring in tightening financial conditions. 

Economists expect there to be a decline, but activity should remain elevated.  Furthermore, the dollar is strengthening relative to other currencies and is acting as a headwind for economic growth for US companies with foreign earnings.

Technical Analysis

Gold prices fell sharply as bearish sentiment builds among investors for XAU/USD. Gold prices face downward momentum toward the 1,800 level and are headed toward $1780, which was near the low of today’s trading session.

Support is seen near the late January 2022 lows near 1780. Resistance is seen at the former support level near the 200-day moving average of 1,837.18. 

Short-term momentum turns positive as the Fast Stochastic generated a crossover buy signal. Prices remain oversold as the fast stochastic prints a reading of 19.82 below the oversold trigger level of 20.

Medium-term momentum turned negative as the MACD generates a crossover sell signal. This occurs as the 12-day moving average minus the 26-day moving average crosses below the 9-day moving average of the MACD line. 

Yields slip, stocks struggle as economic fears grow

By Herbert Lash

NEW YORK (Reuters) – U.S. stocks closed mixed on Monday as downbeat Chinese and New York state data kindled recession fears, but the 10-year Treasury note’s yield staying firmly under 3% spurred hopes the Federal Reserve will prudently hike interest rate hikes.

Chinese retail and factory activity fell sharply in April as COVID-19 lockdowns severely disrupted supply chains while New York’s factory output slumped in May for the third time this year amid a collapse in new orders and shipments.

The Chinese data cast a long shadow over the world’s second-largest economy while the steep drop in New York manufacturing could be an early signal of the impact of the Fed’s plans to tighten monetary policy to tackle rapidly rising inflation.

MSCI’s gauge of stocks across the globe closed down 0.21% and Treasury yields fell, with the benchmark 10-year note down 4.7 basis points at 2.886% after hitting 3.2% a week ago. Some see the decline since then as a sign the market has priced in all or most of the Fed’s expected rate hikes.

“The most important thing happening in the market right now is the fact that the 10-year yield has held below 3%,” said Tom Hayes, chairman and managing member of Great Hill Capital LLC.

Five Fed officials slated to speak on Tuesday also is key considering the market’s recent tumble, he said.

“Usually when you’re near a low in the market and you got five Fed speakers, they’re generally not there to talk the market down,” Hayes said.

With earnings growth turning positive and a more reasonable price-to-earnings ratio, stocks are more attractive, he said.

The pan-European STOXX 600 index ended flat, up 0.04%, with declining German and French indices closing lower and Britain’s FTSE 100 rising on the day.

Emerging market stocks rose 0.30% and on Wall Street, the Dow Jones Industrial Average rose 0.08%, but the S&P 500 lost 0.39% and the Nasdaq Composite dropped 1.2%.

China remains an issue, as does Europe, especially eastern Europe and Putin’s threats toward Finnish and Swedish plans to join NATO, said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder.

“When you see big up days, I’m not surprised to see some profit-taking on the subsequent day,” Ghriskey said, referring to Friday’s rally on Wall Street. “We’re simply seeing a reaction to recent strength. There are various factors driving the market, but in general, none of them are very positive.”

Goldman Sachs raised its 2022 earnings per share growth forecast to 8% from more than 5%, but cut its year-end target for the S&P 500 to 4,300 from 4,700 on interest rate and growth fears.

Former Goldman Chief Executive Lloyd Blankfein said on Sunday he believes the U.S. economy is at risk of possibly going into a recession as the Fed continues to raise rates to tackle rising inflation.

The dollar was down slightly after hitting a 20-year peak last week.

The dollar index fell 0.316%, with the euro up 0.18% at $1.0431 and the Japanese yen 0.09% firmer at 129.07 per dollar.

The dollar is likely to strengthen because of the macro economic outlook, whose fundamentals don’t look good, said Bipan Rai, North America head of FX Strategy at CIBC Capital Markets.

“From a risk-off perspective, that should still support the dollar against most currencies,” Rai said.

But the dollar is consolidating after recent strength and could see more range-bound trading sessions, he said.

The euro was near its lowest since 2017. European Central Bank policymaker Francois Villeroy de Galhau said the euro’s weakness could threaten the central bank’s efforts to steer inflation toward its target.

Gold rose slightly as declining Treasury yields offset headwinds from a relatively firm dollar that, along with the prospect of interest rate hikes, had pushed bullion to a more than 3-1/2 month low.

U.S. gold futures settled up 0.3% at $1,814 an ounce.

Oil rose as the European Union stepped closer to an import ban on Russian crude and traders viewed signs that the COVID-19 pandemic was receding in the hardest-hit areas of China, suggesting a significant demand recovery was in the works.

U.S. crude futures settled up $3.71 at $114.20 a barrel, while Brent rose $2.69 to settle at $114.24 a barrel.

Bitcoin last fell 5.21% to $29,664.88.

European government bond yields rose, with Germany’s 10-year yield down 0.9 basis points at 0.943% – below the roughly eight-year high of 1.19% it reached last Monday.

The ECB will likely decide at its next meeting to end its stimulus program in July and raise interest rates “very soon” after that, ECB policymaker Pablo Hernandez de Cos said on Saturday.

(Reporting by Herbert Lash; additional reporting by Elizabeth Howcroft in London; editing by Ed Osmond, Chizu Nomiyama, Jonathan Oatis and Richard Chang)

U.S. Supreme Court backs Ted Cruz, dumps campaign finance curb

By Lawrence Hurley

WASHINGTON (Reuters) -The U.S. Supreme Court on Monday further undermined campaign finance restrictions, striking down as a free speech violation part of a bipartisan 2002 law challenged by Republican Senator Ted Cruz that federal officials had touted as an anti-corruption safeguard.

The justices, in a 6-3 ruling, found that a $250,000 cap on the amount of money political candidates can be reimbursed after an election for personal loans to their own campaigns ran afoul of the U.S. Constitution’s First Amendment guarantee of freedom of speech by unjustifiably burdening political expression.

In the ruling authored by Chief Justice John Roberts, the court’s conservative justices were in the majority and liberal justices in dissent. Roberts wrote that the law in question “burdens core political speech without proper justification.”

It was the latest in a series of rulings in which the conservative-majority court has rolled back campaign finance restrictions, citing free speech concerns.

Roberts wrote that the government had failed to show that the measure “furthers a permissible anti-corruption goal, rather than the impermissible objective of simply limiting the amount of money in politics.”

In a blistering dissenting opinion, liberal Justice Elena Kagan said the court was effectively aiding and abetting corruption in Washington by allowing donors to contribute to a campaign after an election in a way that benefits the candidate personally.

“In striking down the law today, the court greenlights all the sordid bargains Congress thought right to stop,” Kagan wrote.

Politicians will know that such payments will go directly to them via the campaign, Kagan added, and the donors will hope for something in return.

“The politician is happy; the donors are happy. The only loser is the public. It inevitably suffers from government corruption,” Kagan said.

Cruz, first elected to represent Texas in the Senate in 2012, sued the Federal Election Commission (FEC), the agency that enforces election laws, after his successful 2018 re-election race against Democratic rival Beto O’Rourke. Cruz had lent his campaign organization $260,000 but was limited by the law to a $250,000 reimbursement from his campaign.

A Cruz spokesperson called the ruling a “resounding victory for the First Amendment.” An FEC spokesperson declined to comment.

Trevor Potter, president of Campaign Legal Center, a nonpartisan group that supports campaign finance laws, expressed disappointment at the ruling.

“Permitting candidates to solicit unlimited post-election contributions to repay their personal campaign loans and put the donor money in their own pockets gives an obvious and lamentable opening for special interests to purchase official favors and rig the political system in their favor,” Potter said.

Democratic President Joe Biden’s administration, acting on behalf of the FEC, had appealed a Washington-based three-judge panel’s 2021 ruling unanimously striking down the provision on free speech grounds.

The provision at issue was part of a major campaign finance law that already has been chipped away at by the Supreme Court including in a landmark 2010 ruling https://www.reuters.com/article/us-usa-court-politics/landmark-supreme-court-ruling-allows-corporate-political-cash-idUSTRE60K3SK20100121 that allowed unlimited independent spending by corporations and unions during elections as constitutionally protected free speech.

The Supreme Court has struck down various provisions of the 2002 Bipartisan Campaign Reform Act, often called the McCain-Feingold law in recognition of its main Senate sponsors, John McCain and Russ Feingold.

In finding that the limit was not justified to deter corruption, Roberts endorsed the arguments made by Cruz, saying that restrictions already exist on how much money individuals can donate during an election cycle, currently capped at $2,900. Roberts added that the status quo likely benefited incumbents over challengers because new candidates often have to loan money to their campaigns and can find it more difficult to attract donations.

“This landmark decision will help invigorate our democratic process by making it easier for challengers to take on and defeat career politicians,” Cruz’s spokesperson said.

Cruz unsuccessfully sought his party’s 2016 presidential nomination, later becoming a prominent supporter of former President Donald Trump.

(Reporting by Lawrence Hurley; Editing by Will Dunham)

S&P 500 ends lower as Tesla falls, while energy rallies

By Amruta Khandekar and Noel Randewich

(Reuters) – The S&P 500 ended lower on Monday, with Tesla and other growth stocks losing ground after downbeat Chinese economic data added to worries about a global slowdown and rising interest rates.

China’s economic activity cooled sharply in April as widening COVID-19 lockdowns took a heavy toll on consumption, industrial production and employment, adding to fears the economy could shrink in the second quarter.

However, energy stocks got a lift from optimism that China would see significant demand recovery after positive signs that coronavirus pandemic was receding in the hardest-hit areas.

The S&P 500 energy index rallied to a 2014 intra-day high, and it closed up 2.6%, making it the strongest performer among 11 sector indexes.

Investors questioned whether a strong day on Wall Street last Friday might signal the end of a recent sell-off that has left the S&P 500 down about 16% from its record high close in January.

“After the big rally on Friday, people are looking around and asking whether it feels sustainable,” said Ross Mayfield, an investment strategist at Baird in Louisville, Kentucky. “Does it feel like the momentum thrust you would see coming off of a low, or is there still more of a capitulation to be worked out?”

Many of Wall Street’s megacap growth stocks were lower, with Amazon and Google-owner Alphabet losing more than 1% and weighing on the S&P 500 and Nasdaq.

Twitter fell more than 8% after Bloomberg reported that Elon Musk said a deal to buy the social media company at a lower price than his previously agreed $44 billion was “not out of the question.”

Tesla, which Musk leads, fell almost 6%.

The S&P 500 healthcare sector index rose 0.7%, lifted by a 2.7% jump in Eli Lilly & Co after the drugmaker won U.S. approval for tirzepatide, to treat adults with type 2 diabetes.

Graphic: S&P 500 components – https://fingfx.thomsonreuters.com/gfx/mkt/lgpdwemagvo/SPX_by_marketcap.png

Investors have been worried that aggressive interest rate hikes by the U.S. Federal Reserve to combat decades-high inflation could tip the economy into a recession, with the conflict in Ukraine, supply chain snarls and the pandemic-related lockdowns in China exacerbating the economic troubles.

Data on Monday showed factory activity in New York state slumped in May for the third time this year amid a collapse in new orders and shipments.

Traders are now pricing a near 86% chance of a 50-basis-point hike by the Fed in June.

Unofficially, the S&P 500 declined 0.39% to end the session at 4,008.01 points.

The Nasdaq declined 1.20% to 11,662.79 points, while Dow Jones Industrial Average rose 0.08% to 32,223.42 points.

Investors are focused on retail sales data due on Tuesday, following worrying inflation and consumer sentiment data last week.

Retailers including Walmart Inc, Home Depot and Target Corp are due to report their quarterly results this week.

Spirit Airlines rallied 13.5% after JetBlue Airways launched a hostile takeover bid for the discount carrier. JetBlue shares slipped 6.1%, while shares of rival bidder Frontier Group gained almost 6%.

Advancing issues outnumbered declining ones on the NYSE by a 1.08-to-1 ratio; on Nasdaq, a 1.35-to-1 ratio favored decliners.

The S&P 500 posted one new 52-week high and 31 new lows; the Nasdaq Composite recorded 17 new highs and 190 new lows.

Volume on U.S. exchanges was 11.3 billion shares, compared with a 13.2 billion average over the last 20 trading days.

(Reporting by Amruta Khandekar and Devik Jain in Bengaluru and Noel Randewich in San Francisco; Additional reporting by Devik Jain in Bengaluru; Editing by Shounak Dasgupta and Lisa Shumaker)

Gold Price Futures (GC) Technical Analysis – Confirmation of Reversal Bottom Will Shift Momentum to Upside

Gold futures are surging late in the session on Monday after a sudden drop in U.S. Treasury yields sent the U.S. Dollar to its low of the session. Earlier in the session, the market fell to a more than three-and-a-half month low.

At 19:22 GMT, June Comex gold futures are trading $1823.40, up $15.20 or +0.84%. The SPDR Gold Shares ETF (GLD) is at $170.13, up $1.34 or +0.79%.

10-Year Treasury Yield Falls to Start the Week

The yield on the U.S. 10-year Treasury note fell on Monday to start the new trading week as investors looked ahead to fresh economic data and monitored any clues on the path of monetary policy.

The yield on the benchmark 10-year Treasury note fell 6 basis points to 2.877%. The yield on the 30-year Treasury bond declined 1 basis point to 3.086%.

The drop in Treasury yields reduced the opportunity cost of holding non-yielding gold futures, triggering a short-covering rally. It also caused the U.S. Dollar to weaken, making dollar-denominated gold a more attractive asset to holders of foreign currencies.

Daily June Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, Monday’s intraday chart pattern suggests momentum is shifting to the upside.

A trade through $1785.00 will signal a resumption of the downtrend, while a move through $1910.70 changes the main trend to up.

The minor trend is also down. A trade through $1858.80 will change the minor trend to up. This will shift momentum to the upside.

The minor range is $1910.70 to $1785.00. Its 50% level or pivot at $1847.90 is the nearest upside target.

The main resistance is a pair of retracement levels at $1897.70 and $1908.10.

Daily Swing Chart Technical Forecast

Trader reaction to $1808.20 is likely to determine the direction of the June Comex gold market into the close on Monday.

Bullish Scenario

A sustained move over $1808.20 will indicate the presence of buyers. If this continues to generate enough upside momentum then look for the move to extend into the minor pivot at $1847.90.

Bearish Scenario

A sustained move under $1808.20 will signal the return of sellers. If this creates enough downside momentum then look for a retest of the intraday low at $1785.00, followed by the January 28 bottom at $1783.80.

Side Notes

Following the prolonged move down in terms of price and time, a close over $1808.20 will form a potentially bullish closing price reversal bottom. If confirmed, this could trigger the start of a minimum 2-day counter-trend rally.

For a look at all of today’s economic events, check out our economic calendar.

Factbox-Buffalo shooting victims included deacon, retired cop, grocery worker

(Reuters) – As investigators delved more deeply into why a young white man went on a shooting rampage at a Buffalo, New York, grocery store, fresh details emerged on Monday about the 10 people who were killed and the three who were wounded in the racist attack. [L2N2X80NG]

The 13 victims – 11 of them Black – came from many walks of life. There was a pharmacist, a church deacon, a retired police officer who worked as a security guard at the store, and a young man who pushed carts and did other jobs.

Following are brief biographical sketches of those killed:

Ruth Whitfield

Whitfield, 86, was the mother of former Buffalo fire commissioner Garnell Whitfield. She was on her daily trip home from visiting her husband in a nursing home when she stopped at Tops, according to reports in local media.

“My mother was my father’s caretaker,” Whitfield told CBS News.

Katherine “Kat” Massey

Massey, 72, a civil rights advocate for the Black community in Buffalo, frequently wrote letters to the Buffalo News. A year ago, she wrote a letter that focused on the escalating gun violence in Buffalo and many major U.S. cities.

“Illegal handguns, via out of state gun trafficking, are the primary culprits,” she wrote, arguing for more federal action and legislation to end gun violence.

Her sister told the Buffalo News that Massey was “a beautiful soul.”

Pearly Young

Known to many as “Miss Pearly,” Young taught Sunday school and led youth groups at her church, the Buffalo News reported.

She ran a food pantry in the Central Park neighborhood of Buffalo for 25 years, according to a tweet from news reporter Madison Carter.

Young, 77, was a grandmother and missionary who loved “singing, dancing” and being with family.

Margus D. Morrison

Morrison, 52, was a father of three from Buffalo, his mother told ABC 7 Buffalo. Since 2019, he worked as a bus aide for a local Buffalo school, USA Today reported.

Andre Mackneil

Mackneil, 53, who traveled to Buffalo to visit with relatives, was at the grocery store to pick up a surprise birthday cake for his grandson, but the trip ended in tragedy, USA Today reported. His cousin Clarissa Alston-McCutcheon said Mackneil “loved family – was always there for his family.” He lived in Auburn, New York, about 120 miles east of Buffalo, police said.

Aaron Salter

Salter, 55, a former Buffalo police officer who worked as a security guard at Tops after retiring, was praised for his efforts to stop the shooter. Buffalo Police Commissioner Joseph Gramaglia called Salter a “hero in our eyes.”

He fired at the gunman, but the assailant was wearing body armor and was not harmed by the shot, according to multiple reports.

Geraldine Talley

Talley, 62, from Buffalo, was one of nine siblings, her younger sister, Kaye Chapman-Johnson, told ABC News. She had a long-time career as an executive assistant and was known for her smile as well as for her cheesecake, People reported.

Roberta A. Drury

Roberta Drury, 32, was known as a vibrant, outgoing person who “could talk to anyone,” her sister Amanda Drury said on Facebook Messenger.

She had moved to Buffalo from the Syracuse, New York, area to be with her older brother after his bone marrow transplant. She helped him with his bar, The Dalmatia, and with his family.

Heyward Patterson

Patterson, 67, was a church deacon who gave people rides back and forth from the grocery, according to the Buffalo News.

Celestine Chaney

Chaney, 65, of Buffalo, a breast cancer survivor, was a single mother who retired from businesses that manufactured suits and baseball caps. She had gone to Tops to buy strawberries to make shortcake, her son, Wayne Jones, told the New York Times.

Three other people were wounded in the attack:

Jennifer Warrington

Warrington, 50, worked as a pharmacist at the supermarket, the Buffalo News reported. Warrington, from Tonawanda, New York, a suburb of Buffalo, was treated and released from Erie County Medical Center.

Zaire Goodman, 20, a Tops store employee, was pushing shopping carts back to the store when he was shot in the neck, his grandfather, Charles Everheart, Sr., told Reuters. Goodman was treated and released from Erie County Medical Center.

Christopher Braden

Braden is 55 and from Lackawanna, New York, outside of Buffalo.

(Reporting by Jessica DiNapoli and Barbara Goldberg; Editing by Aurora Ellis)

Japanese Investment Bank Nomura To Launch Bitcoin, Crypto Subsidiary

Key Insights:

  • Reportedly, Nomura is set to launch a crypto arm to offer institutional clients BTC and other digital asset services.
  • The wholly-owned unit will have a staff of a hundred by next year.
  • Nomura executed started trading crypto derivatives last week.

Japan’s largest investment bank Nomura has announced the launch of a new extension focused on cryptocurrencies, decentralized finance (DeFi), and non-fungible tokens (NFTs).

Targeting Institutional Clients

Nomura Holdings, Inc is a Japanese financial holding company and a principal member of the Nomura Group. According to a report from the Financial Times, Nomura is launching a new subsidiary focused on institutional client services for bitcoin and other cryptocurrencies.

Reportedly, Nomura plans to have around 100 people working for the subsidiary by the end of 2012. While the current executives will be primarily responsible for running the company, sources close to the firm have revealed that there are plans for extensive outside hiring.

Just last week, the Japanese investment bank began trading cryptocurrency derivative contracts. This strategic move placed the bank on track with competitors such as Goldman Sachs (GS) and JPMorgan (JPM), giving clients a way to access the cryptocurrency market.

Nomura’s current Chief Digital Officer for its wholesale business, Jez Mohideen, will head the new project. That said, for now, it is reported that fifteen current staff members will be transferred to Nomura’s yet-unnamed crypto company.

Crypto Firms Increase Offerings Despite the BTC Fall

After launching over-the-counter cryptocurrency derivatives with bitcoin (BTC) non-deliverable forwards and non-deliverable options for clients in Asia out of Singapore, the bank has yet again accelerated crypto growth.

Seemingly, despite the recent market volatility and loss in market cap, Nomura has continued to make advancements in the space. The firm also recently announced its first bitcoin futures and options trades on the Chicago-based exchange CME.

Reportedly, the trades were made via Cumberland, the crypto arm of trading firm DRW.

Apart from Nomura, Goldman Sachs and JPMorgan are among other top players that have also been developing their crypto-asset offerings lately.

Gold ticks up as dip in U.S. yields loosens dollar’s grip

By Ashitha Shivaprasad

(Reuters) – Gold rose slightly on Monday as a retreat in U.S. Treasury yields offset headwinds from a relatively firm dollar, which, along with looming interest rate hikes, earlier pushed bullion to a more than three-and-a-half-month low.

Spot gold rose 0.3% to $1,817.12 per ounce by 1:52 p.m. ET (1752 GMT), after earlier hitting its lowest since Jan. 31 at $1,786.60. U.S. gold futures settled up 0.3% at $1,814.

Gold’s slight bounce was attributable to a dip in Treasury yields and a small pullback in the dollar, RJO Futures senior market strategist Bob Haberkorn said, adding that the overall trend for the dollar was “still high as the Fed is being aggressive with its rate hikes”. [US/]

“All things considered, gold is holding up, it should be significantly lower… it will find support slightly below the $1,800 level. Also, there is enormous demand for physical gold and silver.” [GOL/AS]

The dollar inched lower, but still held near a two-decade peak, making gold expensive for overseas buyers. [USD/]

Although gold is considered a hedge against inflation, higher interest rates to tame rising prices curb appetite for bullion, which pays no interest.

“Many still regard gold as being significantly undervalued, and would be even more wiling to buy the metal now that prices have weakened,” Fawad Razaqzada, market analyst at City Index, said.

Spot silver gained 2.2% to $21.53 per ounce, after hitting its lowest since July 2020 on Friday.

Silver has found itself caught up in the broader sell-off in equities and gold, being punished for being an industrial metal at a time when growth forecasts are being trimmed, Rupert Rowling, market analyst at Kinesis Money, said.

Platinum rose 0.2% to $940.28, while palladium rose 3.9% to $2,019.70.

Autocatalyst maker Johnson Matthey said a surplus in the platinum market should shrink this year and the palladium markets are likely to move back into deficit.

(Reporting by Ashitha Shivaprasad and Swati Verma in Bengaluru; Editing by Shounak Dasgupta and Shailesh Kuber)

Brazil’s central bank director not ruling out more rate hikes beyond June

By Marcela Ayres

BRASILIA (Reuters) -Brazil’s central bank Monetary Policy Director Bruno Serra indicated on Monday that policymakers have not ruled out further interest rate hikes beyond June, saying “time will tell”.

The remarks come amid market discussions on the need for an even stricter monetary tightening cycle at a moment when inflation expectations keep drifting further above official targets.

Earlier in May, the central bank raised interest rates by 100 basis points to 12.75%, from a 2% record low in March last year, signaling a smaller adjustment for next month.

“We put ourselves in a situation of signaling another hike as probable. From now on, time will tell,” said Serra while participating in a conference hosted by Goldman Sachs.

He acknowledged preferring lower interest rate fluctuations but recognized that this is not always possible.

“Preferring the scenario of interest rate stability for a longer period is one thing, but we are not tied to a specific scenario. We are tied to chasing the center of the (inflation) target in the relevant horizon as we have done in recent years.”

Serra said that maintaining high interest rates for a longer period to tame inflation is preferable, when possible, to raising rates and then quickly lowering them.

After a recent depreciation of the Brazilian real, he said the currency was affected mainly by the weakening of the yuan, but also by the U.S. monetary tightening. Despite this, he added that the trend for the exchange rate is to perform “much better” than in 2020 and 2021.

(Reporting by Marcela Ayres; Editing by Lisa Shumaker)