The black gold attempted a comeback on Tuesday, as markets resorted to profit-taking on their short positions after three back-to-back days of losses. Further, a dramatic turnaround in the risk sentiment, induced by the Yuan recovery, also helped the higher-yielding oil to recover losses.
Global Economic
Global Economic – The global economy is the worldwide system of trade, production, and finance that connects countries. It involves the exchange of goods, services, and money across borders, driven by businesses, governments, and consumers. This system shapes jobs, wealth, and growth everywhere.
Federal Reserve chairman Jerome Powell announced an interest rate cut of 0.25% Wednesday
Federal Reserve chairman Jerome Powell announced an interest rate cut of 0.25% Wednesday, confirming analysts’ expectations of a cut amid softening inflation, a strong consumer economy and an uncertain international trade outlook.
Spot Gold Hold Near $1,428, Waiting FOMC & US-China Trade Talks
Gold Silver Reports (GSR) – The precious metal failed to build on its modest uptick witnessed over the past two trading session and was now being weighed down by a combination of negative factors – including the prevalent bullish sentiment surrounding the US Dollar and improving global risk sentiment.
ECB Expected – Interest Rate Unchanged at 0% as Expected
“ECB expects interest rates to remain at their present or lower levels at least through the first half of 2020, and in any case for as long as necessary to ensure continued sustained convergence of inflation to its aim over the medium term.”
Federal Reserve officials Signaled They are Ready to Cut Interest Rates
Federal Reserve officials signaled they are ready to cut interest rates by a quarter-percentage point at their coming meeting, while indicating the potential for additional reductions because they are worried about a slowdown in global growth, an increase in trade-policy uncertainty and a pullback in inflation.
Thanks to US Trade War – China’s Growth Slides to Weakest Pace in Almost Three Decades
Gold Silver Reports (GSR) – China’s growth slowed to its weakest pace in almost three decades in the second quarter, with the US-China trade war and weakening global demand weighing on the world’s number-two economy, official data showed Monday.
WHAT HAPPENS IF TARIFFS REMAIN AT STATUS QUO OR UNITED STATES ADDS MORE TARIFFS?
Two scenarios are considered here: The first includes the tariffs in place on $250 billion worth of imports by the United States under Section 301 of the US Trade Act of 1974, and by China on $110 billion worth of imports from the United States, which were imposed in retaliation for the Trump administration’s tariffs.