Daily Summary: Gold fell to its lowest level in 3 months due to the more hawkish stance of central banks.

• Wall Street indices swung back and forth during today’s session. Major US indices started the session lower, then strengthened, but have since given up many of those gains.

• The S&P 500 is trading 0.1% higher, the Nasdaq is up 0.6%, the Dow Jones is down 0.1%, and the Russell 2000 is down 0.8% at the moment.

• Federal Reserve Chairman Powell reiterated during his testimony before the US Senate Committee today that two more interest rate hikes would be appropriate this year. Powell also mentioned that the Fed does not see interest rate cuts in the near future.

• US bank stocks came under pressure after Federal Reserve Chairman Powell said that regulators are considering increasing capital requirements after the recent turmoil in the banking sector.

• Dollar strength increased in the second half of the day, which added pressure on precious metals. Gold is trading down about 1% and is dropping to levels not seen since mid-March 2023.

• European stock indices closed lower today. The German DAX index fell 0.2%, the French CAC 40 index and the British FTSE 100 index fell by about 0.8%, while the Dutch AEX index ended unchanged.

• The Bank of England surprised by raising interest rates by 50 basis points, bringing the main interest rate to 5.00%, the highest level since September 2008 (4.75% expected). The British pound quickly moved higher, but then gave back all of those gains.

• Morgan Stanley and Goldman Sachs now expect the Bank of England to raise 50 basis points at the August meeting.

• The Central Bank of the Republic of Turkey raised the one-week repo rate by 650 basis points, from 8.50% to 15.00%. Although the increase was significant, it was well below the 1,250 basis points (rate of 21.00%) that the market had expected.

• The Turkish lira fell to an all-time low against the dollar and the euro. USDTRY is trading in excess of 4% on the day.

• The Swiss National Bank (SNB) announced a 25 basis point interest rate hike, in line with market expectations. The Swiss National Bank revised its inflation forecasts lower, which led to a correction in the Swiss Franc market. However, the Swiss National Bank also said that it does not rule out raising interest rates in the future.

• Surprised by the higher-than-expected rate hike, Norges Bank raised its key rate by 50 basis points to 3.75% (3.50% expected). The Bank of Norway has revised its inflation forecasts, suggesting there will be more interest rate hikes. NOK strengthened after the decision.

• US jobless claims settled at 264,000, just above the market estimate of 260,000. The previous week’s data was revised up from 262,000 to 264,000.

• Natural gas fell after the Energy Information Administration report showed an increase of 95 billion cubic feet in natural gas reserves in the United States. The increase was higher than expected, exceeding 90 billion cubic feet, and also higher than the average of the past five years for this period.

• The US Department of Energy (DOE) report showed a larger-than-expected drop in oil reserves, with a drop of 3.83 million barrels (expectations were for a drop of 0.4 million barrels). In addition, slight increases in benzene and distillate reserves were noted.

• After the DOE report, the price of oil was initially flat, but then its decline deepened throughout the day. Brent and WTI are both trading up more than 3% on the day.

Gold fell to its lowest level since mid-March due to central banks’ hawkish stance. Gold broke below the lower border of the Overbalance structure today, and according to the Overbalance methodology, a downtrend reversal occurred. Source: xStation5.

This report is provided for general information and educational purposes only. No opinions, analyses, prices or other content constitute investment advice or a recommendation under Belize law. Past performance does not necessarily indicate results and anyone acting on such information does so in no way. XTB accepts liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from use of or reliance on such information.CFDs (“CFDs”) are products It is highly leveraged and carries a high level of risk. Make sure you understand the risks associated with it.”