The Magazine for Asian Investors
The probable Evergrande meltdown has already pushed the gold price back above $1750 yesterday. Before the Fed meeting today and tomorrow, the gold price could advance its upward trend from yesterday.
Gold is up 0.6% at $1775.55 per ounce 9:35 PM (GMT+7).
Today, the silver price is up as well with 0.7% at $22.41 per ounce.
The rumors that have persisted for some time about a possible financial crisis in China triggered by Evergrande Group (3333.HK) seem more and more likely. This week will show whether Evergrande can pay the bond interest of more than $80 million. If Evergrande is not able to pay this amount, the fate of the company might be sealed. It is still questionable whether the Chinese government will come to Evergrande’s aid. According to statements, Evergrande should not hope for help from Beijing.
In the meantime, Evergrande’s share price is tumbling deeper and deeper into the abyss and has lost 85% of its value within the last 6 months.
Tapering or does Fed Chairman Jerome Powell crank up the printer again and help the U.S. economy due to the probable Evergrande meltdown? Investors hope to get an answer to this question after the Fed’s FOMC meeting scheduled for today and tomorrow. Many assume that the Fed will start tapering already this year after the U.S. labor market data point in a positive direction.
The Fed recently made negative headlines twice after senior people within the Fed sold shares under the pretext of conflicts of interest after the stock market had climbed from high to high this year. Should senior Fed officials possibly know more about the coming tapering or another financial crisis?
Furthermore, the Fed was in the spotlight for buying the same assets as 3 senior Fed employees including Chairman Powell. This of course raises the question in which interest the Fed is acting?
The oil prices go further downhill after the U.S. dollar rises higher yesterday. Tensely one looks therefore also on the crude oil inventories which will be announced tomorrow. Last week, the crude oil inventories fell far more than expected.
Brent crude oil falls 0.82% to $73.63 per barrel.
WTI crude oil falls by 0.87% to $69.83 per barrel.
The situation in the Gulf of Mexico looks more optimistic again since large parts of the oil production could re-start. Although still missing about 20%, but that should have recovered by the end of the year.
Royal Dutch Shell, meanwhile, has announced it will sell its Permian Basin assets for $9.5 billion. ConocoPhillips (NYSE: COP) will be the buyer.
The uranium price is taking a break today and has found itself just below the $50 level at $49.90. The Sprott Physical Uranium Trust now has a NAV of $1.47 billion and was able to purchase 28,314,382 pounds of U3O8 from the spot market.