Trump will decide whether to hit Iran in two weeks, geopolitical tensions offset the hawkish Fed stance, gold price decline is limited

Basic news

On Friday (June 20, Beijing time), spot gold was traded near $3,365.88/barrel. The intensified geopolitical tensions offset the pressure brought by the hawkish stance of the Federal Reserve, and gold price fluctuations were limited; US crude oil rose, trading near $73.66/barrel. The air war between Israel and Iran continued to escalate, and the uncertainty of the possible intervention of the United States made investors nervous. Gold prices changed little on Thursday, as geopolitical tensions offset pressure from the hawkish stance of the Federal Reserve, with platinum falling after hitting its highs since September 2014. The US market is closed during holidays.

Spot gold fell 0.1% to $3365.79 per ounce. U.S. gold futures fell 0.7% to $3382.80 per ounce.

The Federal Reserve suggests that inflation risks remain high. Therefore, this reduces the possibility of a return to interest rate cuts and puts pressure on gold prices."

In terms of geopolitics, Israel bombed nuclear targets in Iran on Thursday, while Iran fired missiles and drones at Israel after hitting an Israeli hospital overnight, marking a further escalation of the air war that lasted for a week, with both sides showing no signs of exiting the strategy.

For other metals, platinum fell 3.7% to $1,269.30, and had risen to its highest level since September 2014 earlier in the session. Palladium fell nearly 1.1% to $1,038.56; spot silver fell 1.4% to $36.21 an ounce.

Yuan Market

Oil prices rose more than 1% on Thursday, with a week-long air war between Israel and Iran continuing to escalate, and uncertainty about the possibility of U.S. intervention has made investors nervous.

The settlement price of Brent crude oil futures rose 2.8% to $78.85 a barrel, the highest settlement price since January 22. U.S. crude oil futures rose 2.7% to $77.20 a barrel in July. Trading was light on Thursday as the United States was a federal holiday.

Israel bombed Iran's nuclear target on Thursday, and Iran launched missiles and drones at Israel after attacking an Israeli hospital at night.

There are no signs of stopping at this time. Israeli Prime Minister Netanyahu said Tehran will pay the "full price", while Iran warned "third parties" not to participate in the attack.

The White House said Thursday that President Trump will decide whether the United States will intervene in the Israeli-Iran conflict in the next two weeks. Rory Johnston, an analyst and founder of xmserving.commodityContext xmserving.communications, said the prospect led to higher crude oil prices. "The market is forming a consensus that the United States will participate in some way," Johnston said.

Iran is the third largest oil producer in the Organization of Petroleum Exporting Countries (OPEC), with crude oil production of about 3.3 million barrels per day. About 18 million to 21 million barrels of oil and petroleum products pass through the Strait of Hormuz on the southern coast of Iran every day, with widespread concerns that the Israeli-Iran conflict could disrupt oil trade circulation.

JPMorgan said Thursday that the extreme situation where the conflict expands to wider regions, including the closure of the Strait of Hormuz, could cause oil prices to soar to $120-130 a barrel.

Goldman Sachs said on Wednesday that a geopolitical risk premium of about $10 a barrel is reasonable given that the reduced supply in Iran and a wider supply disruption could push Brent crude above $90 a barrel.

A senior Russian oil official said on Thursday that OPEC+ oil-producing countries should continue to advance their production increase plans, given the growing demand in the summer. Russian Deputy Prime Minister Novak said at an economic forum held in St. Petersburg that OPEC+ should calmly implement its plans and not use forecasts to scare the market.

Forex Market

The dollar rose slightly on Thursday, with the threat of a wider Middle East conflict looming over the market, while a series of interest rate decisions in Europe highlighted the difficulties central banks face in dealing with rising uncertainty. The rapid rise in geopolitical tensions has boosted the dollar, giving it a recent regaining of safe haven status.

Iran and Israel launched further air strikes on each other on Thursday, and the conflict has entered its seventh day. US President Trump is unquestionable about whether the United States will join Israel to bomb Iran's nuclear base, so market concerns about the possible conflict between the United States.

The Federal Reserve kept interest rates stable on Wednesday. The Bank of England also remained silent on Thursday, saying increased global uncertainty and continued inflation are hidden concerns about the economic outlook. BritainThe pound initially fell, but then recovered most of the lost land.

Similarly, the Swiss franc strengthened against the dollar as the Swiss National Bank cut interest rates as expected. But surprisingly, the Norwegian central bank cut interest rates by 25 basis points, while the market expects the Norwegian central bank to keep interest rates unchanged.

The US dollar and the euro rose 1% against the Norwegian krone. The Norwegian krone remains one of the best-performing currencies against the dollar this year, with an increase of about 11%.

At the same time, the euro fell 0.1% against the US dollar to $1.1473. The dollar rose 0.2% against the yen to 145.56 yen.

The dollar index, which measures the dollar's exchange rate against the other six currencies, remained flat at 98.9, and is about to rise about 0.8% this week, its strongest week since late February.

Francesco Pesole, strategist at Dutch International Group (ING), said that unlike the risks posed by Trump's tax cuts or tariff policies to the U.S. government finances, geopolitical risks and high oil prices are not "risks triggered by the United States", so the dollar may once again play the role of a safe-haven currency. In this environment, the US dollar is still in a better position than energy-dependent hedging tools such as the euro. "The U.S. market closed Thursday due to the federal June holiday, which means liquidity is reduced.

The Fed held interest rates unchanged on Wednesday as expected, and policymakers hinted that borrowing costs may still fall this year, but Chairman Powell warned not to over-value this forecast and said he expected the tariffs imposed by the Trump administration to bring "quite high" inflation.

Powell said that xmserving.commodity price inflation will rebound in the summer as U.S. President Trump's tariffs affect consumers.

Powell said at a press conference on Wednesday, "Ultimately, the tariff costs must be borne by some party, and part of them will be borne by end consumers, and we know this because xmserving.companies say so, and past data prove it." ”

Powell’s remarks highlight the challenges policymakers face in dealing with uncertainty brought about by tariffs and geopolitical risks, which makes the market anxious about the trend of U.S. interest rates.

Nevertheless, traders still believe there will be at least two rate cuts this year, but analysts are not sure when to start cutting rates.

Economists at BNPParibas said, “The Fed has been keeping interest rates unchanged for six consecutive months, and Chairman Powell appears to say the Fed is likely to remain silent throughout the summer, making October the next meeting of ‘possible rate cuts’. We still expect the Fed to remain silent by the end of this year. "

Trump has been strongly criticizing the Fed's chairman for not cutting interest rates faster, and he posted on social media on Thursday that U.S. interest rates should be "downloaded by 250 basis points."

International News

Iran-backed Iraqi Shiite militia vowed: If Trump decides to intervene in the conflict,Attacking US military bases in the Middle East

On Thursday, a powerful Iraqi Shia militia group supported by Iran vowed to attack US military bases in the Middle East if the Trump administration intervenes in the conflict between Israel and Iran. "We are more explicit about reiterating that if the United States is involved in this war, the crazy (U.S. President Donald?) Trump will lose all the trillions of dollars he dreamed of grabbing from the region. An action plan has been developed for this," Abu Alial-Askari, security leader of the Kataib Hezbollah, said in a statement today. The statement also added: "There is no doubt that the U.S. military bases in the entire region will become like duck hunting farms."

Canada warns that it may increase tariffs on U.S. steel and aluminum tariffs will be introduced to prevent the risk of steel and aluminum dumping

If trade negotiations with the Trump administration are deadlocked, Canada has opened its doors to increase tariffs on U.S. steel and aluminum products next month. The Canadian government "will adjust its current counter-tariff tariffs on steel and aluminum products on July 21 to match progress made in the overall trade agreement with the United States," a statement released on Thursday showed. The United States imposes a 50% tariff on foreign steel and aluminum imports, while Canada currently imposes a 25% counter tariff on steel and aluminum products made in the United States. But the two countries are currently negotiating a trade agreement with a tentative deadline of mid-July. "We will certainly continue to advance negotiations in sincerity," Canadian Prime Minister Mark Carney said in a press conference. "At the same time, we must strengthen our strength and protect Canadian workers and businesses from the current unfair U.S. tariffs." Trump will decide whether to strike Iran within two weeks. A spokesman for U.S. President Donald Trump said that Trump will decide whether to strike Iran within two weeks. This xmserving.comes as Israel attacks more Iran's nuclear facilities and warns that its attacks could overthrow Tehran's leadership. White House spokesman Caroline Levitt reposted Trump's oral message, saying, "Given the possibility of negotiations with Iran in the near future is quite high, and the negotiations may be held, but they may not be held, and I will make my decision on whether to act in the next two weeks." Levitt declined to elaborate on Trump's timeline, including how he sees the possibility of success in further negotiations with Iran. Levitt told reporters at the White House that the president's goal (to stop Iran's uranium enrichment and prevent Iran from obtaining nuclear weapons) has not changed, but he also believes that diplomatic means are also feasible if there is a chance.

Zelensky: It is ready for the highest level meeting and is willing to meet Putin

On June 19 local time, Ukrainian President Zelensky said in his regular video speech that Ukraine is ready for the highest level meeting and is willing to meet Putin. He said, "Ukraine is ready for the highest level of meeting, which is about decision-making. I am willing to meet with anyone with decision-making power and authority, including Putin." In addition, he also expressed his hope to be in office during the term of US President Trump.To end the Russian-Ukrainian conflict, "I look forward to his (Trump) help and rely heavily on the influence of the United States."

Iranian Foreign Minister: He will hold talks with the representatives of Britain, France, Germany and the EU on the 20th

On June 19th local time, Iranian Foreign Minister Aragzi said that he will hold talks with the foreign ministers of the United Kingdom, France and Germany and the EU representatives in Geneva, Switzerland on the 20th. According to reports, Aragici said that the talks were arranged at the request of Britain, France and Germany. xmserving.comN said a diplomat from Western European countries said the talks were exploratory and aimed at "understanding the attitudes of all parties" and thus judging what results can be achieved.

Russian Vice Prime Minister: Without Russian oil, the market will not be able to achieve a balance of supply and demand

Russian Vice Prime Minister Novak said that without Russian oil, the global market would almost be able to achieve a balance of supply and demand, adding that sanctions against Russia would only harm the global economy. He pointed out: "Russia is an important player in the energy market and we will supply energy resources to the market. I think the market will not be able to achieve a balance without Russian oil." Novak also emphasized: "Sanctions undermine the global energy balance and affect the long-term investments that should be made to meet the growing global energy consumption." Sources: In negotiations with the United States, the EU is increasingly succumbing to a 10% base tariff

Five sources familiar with the negotiations said that European officials are increasingly accepting the use of 10% "reciprocal" tariffs as the benchmark for any trade agreement between the United States and the European Union. Earlier, US President Trump announced widespread tariffs on trading partners, and US xmserving.commerce Secretary Lutnik has ruled out the possibility of "reciprocal tariffs" that will be imposed on most EU exports to US goods below 10%. Sources said EU negotiators are still urging to lower the tax rate to below 10%. But one of the sources said negotiations to lower tariff levels have become more difficult since the U.S. began to earn revenue from its global tariffs. "10% is a tough problem. We are putting pressure on them, but now they are getting income." Another European source said the EU did not accept 10% as the benchmark tax rate in negotiations, but admitted that it would be difficult to change or repeal the benchmark.

Domestic News

The National Grain Industry Science and Technology Innovation Alliance was established in Beijing

On June 19, the National Grain Industry Science and Technology Innovation Alliance was established in Beijing. The meeting pointed out that the establishment of the National Grain Industry Science and Technology Innovation Alliance is a concrete action to thoroughly implement the national food security strategy and promote the integrated development of scientific and technological innovation and industrial innovation. It is an important measure to safeguard national food security, an effective path to implement the central government's scientific and technological system and mechanism reform deployment, a key support for promoting high-quality development of the grain industry, and a strong guarantee for strengthening talents to develop grain, injecting impetus and adding vitality to serving the high-quality development of the grain industry.

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