FPG ：The release of the U.S. Consumer Price Index (CPI) data is eagerly awaited by market participants, as it can have a significant impact on gold prices 1. [Concerns over escalating tensions in the South China Sea] The South China Sea continues to be a contentious issue as tensions between China and neighboring countries escalate. Recently, China has been increasing its military presence and conducting military exercises in the disputed waters, leading to concerns among regional powers. The United States and its allies have expressed their support for freedom of navigation and have conducted their own military operations in the area to assert their presence. The situation remains fluid and any escalation in the South China Sea could have significant implications for regional stability and global trade. Comments: The South China Sea dispute has been a longstanding issue with competing territorial claims and overlapping maritime interests. It is a complex and sensitive matter that requires careful diplomacy and peaceful resolutions to avoid further tensions and potential conflicts. 2.Russian Defense Minister Shoigu has stated that he may be compelled to use similar weapons in response to reports of the Ukrainian army's alleged use of cluster bombs in an attack. This comes after the United States government announced on the 7th that it would provide additional military support, including cluster ammunition, worth $800 million to Ukraine. The decision to supply cluster ammunition has raised concerns and opposition from the United Nations, the United Kingdom, Austria, Iran, and the United States. On the 11th, the combat department of Tokmak in the Zaporozhe region reported that the Ukrainian army had utilized cluster munitions, causing an impact in the area. As of now, there has been no response from Uzbekistan regarding these developments. 3. U.S. Air Force Chief of Staff Charles Brown attended the nomination hearing of the Chairman of the Joint Chiefs of Staff of the U.S. Military Forces before the Senate Military Committee on the 11th local time. During the hearing, Brown expressed his commitment to adhere to the principles of non-partisanship and non-political involvement in his work if approved for the position. If the Senate ultimately approves Brown's nomination, he will be the first African-American to hold the position of Chairman of the Joint Chiefs of Staff. Comments: Some far-right Republican lawmakers expressed concerns during the hearing that the military's emphasis on racial diversity could weaken its strength. 4. RMB (Chinese Renminbi) is playing a significant role in supporting Argentina's economy as it has become an important currency for valuation, settlement, trading, and reserves. The decision to choose RMB is based on the positive development of economic and trade cooperation between China and Argentina. The increased use of RMB in China-Argentina cooperation will lead to reduced exchange costs, lower exchange rate risks, expanded bilateral cooperation, and support China's investment expansion in Argentina. This will create more job opportunities for Argentina and stimulate economic growth. Comments: Argentina is currently facing its most serious economic crisis in nearly 20 years. However, the internationalization of RMB presents new opportunities and solutions. 5. During the NATO summit in Vilnius, Germany's Chancellor Scholz announced on the 11th that Germany would provide additional military assistance worth approximately 700 million euros to Ukraine. This announcement was also mentioned on the official website of the German Federal Chancellor. As part of this assistance, Germany will provide Ukraine with 40 "Mader" infantry fighting vehicles, 25 "Leopard 1A5" main battle tanks, 5 armored rescue vehicles, as well as two sets of "Patriot" anti-aircraft missile launchers. Ukraine will also receive 20,000 artillery ammunition, 5,000 smoke bombs, reconnaissance drones, and anti-UAV defense systems. Comments: Through this military assistance program, Germany continues to make significant contributions to the prolonged conflict in Ukraine. FPG special analyst Kina’s opinion: Earlier this week, we witnessed a decline in bond yields, which may lead investors to anticipate weaker results in Wednesday's report. This reduces the opportunity cost of holding gold instead of bonds to some extent. Additionally, gold could benefit from the weakening of the dollar, particularly the dollar/yen and US dollar/QIF pairs, which is another factor contributing to its slight increase. FPG special analyst Dawson Daosheng’s opinion: Gold remains in a precarious position, with many major central banks still tightening policies. It is highly likely that the Federal Reserve will raise interest rates at least once more in July. Investors are clearly focusing on the summer and are eager to know if interest rates will decrease again and the pace at which they will do so. This will largely depend on the price trend, making today's CPI report crucial. Dave, a special analyst at FPG: Investors' confidence in the Federal Reserve's stance remains steady. They have already factored in a 25 basis point interest rate hike at the July meeting and believe that the probability of another 25 basis point increase in 2023 is 35%. However, CPI data can impact expectations, affecting the US bond market and the dynamics of gold prices. FPG special analyst Yue Lin’s point of view: Ahead of the announcement of the US CPI today, gold prices are seeking a solid footing. At this juncture, the bank anticipates that CPI will be lower than the market consensus, which could provide further support to gold prices. However, considering the generally stronger-than-expected economic activity in recent weeks and the Federal Reserve's clear inclination to raise interest rates again, the bank now expects a 25 basis point increase in the federal funds rate at the July FOMC meeting. This indicates that the precious metal gold is not yet fully prepared for a significant rally. The above analysis is only for the views of market researchers and is for reference only and is not Regarded as a specific investment suggestion. #Forex #trading #tradingforex