Eva Chen

A robust US retail sales report for September plus upward revisions to August's report reinforce the view that the US economy likely expanded at a 4% annualised rate in the third quarter. Headwinds are set to intensify, but for now the US consumer continues to defy the odds.

Gold price (XAU/USD) clings to mild gains near $1,790 during early Tuesday morning in Europe, despite the US Dollar’s rebound from the intraday low.

The main culprit is demand, which has fallen off in recent months in China's three biggest export markets -- the U.S., the EU and the Association of Southeast Asian Nations (ASEAN).

A new geopolitical order means BRICS countries will have to reassess the organization’s mandate.

By Florence Tan SINGAPORE (Reuters) – Oil prices reclaimed ground on Monday after tumbling more than $2 a barrel in the previous session as optimism from China’s reopening and oil demand recovery outweighed concerns of a global recession.

The Fed faced a tougher situation over the past week as its preferred inflation indicator, PCE, hit another 40-year high and the ISM prices paid indicator spiked 11.5 points to 87.1. While U.S. employment rose by 431,000 in March, a sharp upward correction that boosted the gains of the past two months. However, personal income hasn't kept pace with rising prices. It facilitated a temporary inversion of the yield curve, suggesting that bond markets are losing confidence in the soft landing.

The U.S. Department of Labor reported Friday that the labor market recovery continued in March. Overall employment increased by 431,000 in March. The unemployment rate declined by 0.2 percentage points to 3.6%, still 0.1 percentage points higher than the pre-pandemic level. Although the increase in employment was slightly below market expectations, employment valuations for both January and February were corrected upward. The U.S. monthly average growth for Q1 2022 was 562,000 jobs, with a limited overall impact on gold prices.

As widely expected, the Fed raised the federal funds rate by 25 basis points at last week's (March) meeting and strongly hinted at further rate hikes given the tight labor market and soaring inflation. The Fed also released a new economic forecast brief, showing a sharp upward revision to the inflation outlook and significantly earlier expectations for more rate hikes in 2022 and 2023.

The current inflation in the US is very high. According to the latest data released by the US Department of Labor, the US CPI consumer price index in February was 7.9%, a new high since 1982. Against this backdrop, many are starting to predict whether the Fed will raise rates more aggressively than expected. At the same time, there are also concerns that the Fed's rate hike may cause the stock market to crash. The internal logic of the Fed raising interest rates is not so simple. The Fed raising interest rates will not definetely cause the stock market to crash.

Gold experienced an explosive spike and a surprisingly sharp pullback this past week; the factors that drove the price spike are apparent, yet there was clearly a significant risk premium for a sharp pullback, prompting institutional profit-taking. This week, when the market's attention will turn to Fed Chairman Powell's testimony and Friday's non-farm payrolls data, gold should return to its proper "financial" properties.