The gold price crossed 1900 and reached near the resistance highs 1920. If the market continues to rise, it can move till the next strong resistance from 1930 to 1950 and then up to the 2060 area.
USDJPY fell from high and reached near to the support 125.00
US Dollar: Wells Fargo view of US Dollar in 2023
According to Wells Fargo’s economist view, the Monetary policy view of the US Economy will be tightened in early 2023.US Dollar appreciation has already reached the Current cycle and from Early 2023 US Depreciation is seen in markets.US Dollar Depreciation coincide with FED’s monetary policy tightening occurs in each month. US Economy entered into a recession state by end of 2023 and other international economies will be started to stabilise one by one.
In the later 2024 US Dollar depreciation was seen more once the FED begins interest rate cuts.
US Dollar: US Secretary Janet Yellen expected Rent indexes will come down in coming months
US Secretary Janet Yellen Told Rent indexes were rising and inflation for the last six months was moderate. She expected the Rent indexes will come down in the next six months as a soft landing for the US economy.
USD Dollar weakness against Japanese Yen as per Credit Suisse view
Ahead of the Bank of Japan’s monetary policy meeting, USDJPY will further down is possible due to the Last meeting’s rise in the YCC Policy rate, this time also the same type of announcement is expected. But Interest rates may not change that looks like a disappointing view, JPY Strengthens seen in markets and USDJPY further to the downside is expected as per the Credit Suisse view.
Bank of Japan announced on Friday this week that they are going to purchase additional Japanese Government Bonds (JGB) purchases on Monday concerning Market conditions. The value of purchasing will be decided according to market conditions as the Bank of Japan said on Friday. This announcement makes further weakness happen in USDJPY pairs.
China Covid-19 policy easing will boosted Oil prices and US Dollar to further weakness in Markets
Chinese Government will ease Covid-19 policy conditions in 2023 and help Oil consumption more in 2023. Generally, one million barrels per day for the Middle kingdom increases will help Saudi Arabia and its Friends nations to keep the Oil Prices higher as demand picked up in China.
At least 0.5 million barrels per day will increase in supply side will match the price of Oil, demand erosion will come at the end in western parts of the world in 2023, so production cuts according to demand, these types of situations will help further oil prices will move to 100$ in 2023.
US FED tilting to a Dovish policy from a Hawkish policy makes boosted Oil prices grow up higher making Saudi Arabia and Canadian economy boosted further in Profits.
US Dollar weakness helped Australian Dollar to recover in 2023
Australian Dollar will get benefitted in 2023 due to the aggressive rise in RBA interest rate and the Chinese economy reopening in 2023. The Chinese economy is based Australian Dollar’s strength, Major energy; metals and agriculture exports to China from Australia boosted in 2023.FED’s slower pace of rate hike in 2023 will help the Australian Dollar strengthen against US Dollar in 2023.
US and China talks happening in 2023 as per White House statement
USDCHF is in the consolidation phase due to the US China talks round in 2023 going to happen and FED’s Dovish bias like to expect in 2023.
Atlanta FED President Raphael Bostic said he would be expected a 25bps rate hike will be proper if both leaders of the US and China talk outcome of smooth relations and inflation will further lower in 2023.
In a previously FED Bostic statement, FED acted more aggressively in rate hikes, and rate hikes will be stopped at the end of 2023.
In opposition to these statements, St. Louis FED President James Bullard said FED’s rate hikes should continue longer until a 2% inflation target to achieve.
According to Reuters said, some sources said the White House will going to discuss the recent step down of US exports of Chip making tools to China, and with Japan, Dutch is possible in upcoming visits. White House said both countries did not do the same similar stop down of Chip tools in trade relations. US-China trade relations will help boost US Dollars if future relationships talks at a smooth pace.
New Zealand Dollar rising after US Dollar CPI came down
New Zealand Dollar raises more as US CPI came lower this week, Further; China’s Covid-19 Policy eases restrictions in 2023 and Boosted Kiwi trade relationships with China. Reserve Bank of New Zealand further rate hikes in February. After CPI announcements, the US FED rate hike in February month will be a 25bps chance of 100% rises according to the survey, while the 50bps rate hike report slumped to 8.0%.
Philadelphia President Patrick Harker said easy rate hikes in 2023 are possible with concerns about US CPI coming down the report.
These statements of FED Presidents show the outlook of the US FED rate will be a slower pace of rate hike concerning US CPI data.
US White House Economic Advisor statement on US Economy
The White House Economic Advisor Brian Dees said the US Investment environment is good for the next two-Five years due to a reduction in expenses of House Holds. Gas price levels in moderate conditions will help more for House Holds in the past six months.
Dees also said Congress will talk about the US Debt limit in an upcoming meeting without conditions or no excuses this time.
UK economy expansion shows UK pound stronger against US Dollar
UK Office for National Statistics reported that UK Economy expanded by moderately 0.1% when compared to the 0.20% contraction expected. This number shows a decline from the 0.50% growth recorded in October month and this moderate growth came from disappointing data found in Manufacturing and industrial data. This number shows UK Economy is under struggle, the Bank of England is at end of the rate hiking cycle process, UK Pound finds further stronger or weaker based on the UK Economy rebound or US Dollar Fall after US inflation came in lower in 2023.
Gold: US Dollar weakness makes Precious metals prices higher
Gold price traded at nearly nine months higher as the US Dollar weakened happening in the market. FED rate hikes in Jumbo pace of 75 bps from June to November month and 50bps rate hike in December month due to US CPI inflation data came at lower after aggressive rate hikes measured.
40-year high inflation at 9.1% in June month which is a 2% inflation target of US FED, Now December month inflation data shows 6.5% which drastically falls from 7.1% the previous month. The gold market further tested 1950$ which is the next resistance level in the upcoming days as analysts forecasted, US CPI data is the main gauge for the FED Cycle of interest rate hikes, this time 25 bps rate hike is the possible expectation of a February month after US CPI printed at 6.5%.
Gold output increased to 19.9% in Zimbabwe in 2022
Zimbabwe Gold’s output was recorded higher at 35.38 Tonne in 2022 due to new mining projects, timely payments and incentives given to miners. The gold output was up by 19.5 per cent up when compared to the previous year’s output was said to the newspaper by the Country’s Sole owner Fidelity Gold refineries.
Incentives were offered by Zimbabwe Government for exceeding the normal output of 70.0% and above 80.0% output will give in foreign currency incentives will bring more Gold output in 2022, as per Fidelity Gold refineries Chief executive Peter Magaramombe said in daily Newspaper.
The government also said 80.0% value of Gold output will use for exports and additional Gold is used for Government reserves and exchanges for foreign currencies. Gold is the major foreign currency earner in Zimbabwe’s economy, So Gold prices raise further as demand increases in the Global economy.
SNB expected a Huge loss in 2022 annual payout since 116 year history and small profit booked from Gold Holdings
Swiss National Bank Projected the biggest loss in its 116-year history and the Swiss Government did not receive a pay-out from the SNB in 2022.SNB Expected an annual loss of 132 billion Francs($143 billion) which is estimated to be Five times more than the previous record. The larger contribution of 131 billion Francs came from larger holdings of Foreign currencies, position in Swiss francs alone depreciation of 1 billion francs, SNB earned a 400 million francs profit from Gold Holdings. It is the second time for SNB since launched in 1906 has skipped the yearly payments to Federal Governments and Swiss Cantons as Bloomberg reported. For 2021 SNB has paid out 6 billion francs and Private shareholders still receive a Dividend for 2022.
Unlike other central banks, SNB is a publically traded company and half of the shares are held by Public sector institutions and half of them by Private individuals. Profit earned from Gold investment is mildly positive for SNB’s overall annual loss statement.
Bitcoin
First time since November Crypto market capitalisation of the crypto industry exceeded $1 trillion as per data from Coin Gecko.
The bitcoin market has reached $21000 due to US CPI has reached the bottom now and already reaching its peak in June month. According to data from Coin glass, Crypto short liquidations have exceeded $ 100 million in the last six days. The biggest amount reached on January 14 and exceeded $296 million.US CPI data plays a vital role in global markets and Crypto markets are turned around from the Bottom consolidation mode.
But still, the Macroeconomic environment in Crypto markets is on the Dark side and FTX liquidators have recovered $5 billion in Cash assets as per Hayden Hughes CEO of Social Trading Platform Alpha Impact. Upcoming FED Interest rates will be a slower pace of rate hikes in terms of 25bps according to FED’s President’s view on FED’s Rate hike cycles.
Bit coin: In 2022 Nearly $20 billion used in Illegal transactions as per Chainalysis Firm said
The Illegal use of Crypto currencies hit $20.1 billion in 2022 as the data shows and companies involved in this illegal use of transactions were investigated by US Sanctions as per data given by a Block chain analysis firm. The Crypto markets collapsed in 2022 making more investors’ losses and more brokers closed, and more crypto firms closed. Regulators stepped up to Government for investor protection. Transactions associated with illegal companies raised to 1lakh recorded as chainalysis shows.
Funds handled by Russian Exchange Garantex which is sanctioned by the US Treasury department show most of the illegal volumes in 2022. Most of the activity is done by Russian users in Russian Exchange. They are tagged as Illegal by the US Treasury department. The US also imposed sanctions on Crypto mixing services Blender and tornado cash which is used by a lot of hackers from North Korea and is used for the laundering of US Dollars in illegal activities. Stolen funds in Crypto markets raised to 7% in 2022 including scams, ransom ware, terrorism financing and human trafficking activities. Crypto markets are falling in 2022 making less revenue in Brokers’ firms and turning to illegal scams from hackers and exchanges involved. Chainalysis said $20.1 billion accounted only for Block chain activity and excluded crime such as doing by crypto firms. The numbers also excluded payments frauds and hackers’ crypto assets.
Conclusion
US Dollar depreciation continues as long as US inflation data came to lower as a target to 2% levels of FED’s target. Now FED’s Fund rate going to slow the rate hike in the economy, investors turned assets to more earning assets like Gold, Crypto markets which give much more returns when compared to US Treasury Bonds yields.US and China talks on trade relationships will be smoother expected US Dollar will get further down as fear in the markets gets off. Russia and Ukraine war conflict’s impact on energy prices soaring will come to the end in 2023, Europe, the US and other parts of the Globe will get a sufficient amount of energy storage by using alternative countries’ supplies to these regions. China has eased Covid-19 restrictions helping demand soar in Oil prices and production increased by middle east countries and OPEC+ countries.US Dollar domination currency will get lower in 2023 as fear eases in the market step by step.
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