Gold prices continue to hit historical highs, pointing to the 3600 mark, weak US economic data strengthens bets on interest rate cuts

Basic news

On Thursday (September 4, Beijing time), spot gold trading was around $3,557/ounce, and gold prices continued to rise on Wednesday, setting a new record of a historical high to $3,578.29/ounce. After the release of weak U.S. employment data, the market strengthened expectations for the Fed's interest rate cut later this month, while lingering global uncertainty kept safe-haven demand strong; U.S. crude oil trading was around $63.77/barrel, U.S. oil fell nearly 3% on Wednesday, and the OPEC+ League of Oil-producing Countries will hold a meeting over the weekend and is expected to consider increasing oil production targets again in October.

Focus on this day

The U.S. Senate Financial www.xmniubi.committee held a hearing on nominating Milan as the Federal Reserve Board and Fed Williams delivered a speech at the New York Economic Club.

Stocks

Nasdaq rose 1% on Wednesday, and the S&P 500 also closed higher, helped by a surge in shares of Google's parent Alphabet after a U.S. judge ruled against the spin-off of the www.xmniubi.company and optimistic expectations of the Federal Reserve's possible rate cut this month. The Dow Jones Industrial Average closed slightly lower, with Boeing's stock price falling 2.1%. Alphabet and Apple are the main driving force behind the rise of the S&P 500 and Nasdaq. Alphabet surged 9.1% after a U.S. judge ruled that it would allow Google to continue to control Chrome and Android operating systems, but prohibited it from signing certain exclusive agreements with device manufacturers and browser developers.

Apple rose 3.8% becauseGoogle is allowed to continue to pay partners such as Apple to use its search engine. "Google and Apple have a way out, they have won the big bet, and the court ruling has solidified their reputation," said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma. "At the same time, several Fed officials said labor market concerns remain their main reason for supporting the rate cut. Fed governor Waller said he believes the Fed should cut interest rates at the next meeting. Atlanta Fed President Raphael Bostic also reiterated his position on supporting interest rate cuts, but did not specify the specific time. Data released earlier showed that the U.S. job vacancies decreased in July, indicating that the labor market was weakening.

The Dow Jones Industrial Average fell 0.05% to 45,271.23 points; the S&P 500 rose 0.51% to 6,448.26 points; and the Nasdaq rose 1.03% to 21,497.73 points.

While September has always been a weaker month for U.S. stocks, Peter Cardillo, chief market economist at Spartan Capital Securities, said that market performance this month may not be as difficult as in previous years as markets are widely expected to cut interest rates.

According to CMEGroup's FedWatch tool, U.S. interest rate futures trends show that the market currently expects the Federal Reserve to cut interest rates by 25 basis points at its policy meeting ending on September 17 as high as 96%. Investors are still paying attention to the monthly employment report to be released on Friday.

In terms of individual stocks, Macy's rose 20.7%, after the www.xmniubi.company raised its full-year performance expectations; discount retailer DollarTree fell 8.4%, as the release of its quarterly profit forecast was lower than market expectations, and tariffs were expected to push up costs. As the second-quarter earnings season approaches its end, investors are closely watching third-quarter performance expectations and the possible impact of the Trump administration's tariff policies. Gold prices continued record gains on Wednesday as markets strengthened expectations for the Fed's interest rate cut later this month after weak U.S. employment data were released, while lingering global uncertainty kept safe-haven demand strong. Spot gold rose 1.2% to $3576.59 an ounce, hitting an all-time high of $3578.50 intraday. U.S. gold futures rose 1.2% to $3,635.50.

The U.S. government report said job vacancies fell more than expected in July and recruitment activities remained sluggish, consistent with a slowdown in the labor market.

Fawad Razaqzada, market analyst at CityIndex and FOREX.com, said gold prices were already at record levels before the data was released, and the softening data helped boost gold prices, with the next upward target of 3 per ounce.$600.

After the data was released, traders' bets on the possibility that the Fed would cut interest rates by 25 basis points at its September 16-17 policy meeting increased from 92% to 98%.

Investors are currently turning to the number of initial jobless claims and ADP employment data released on Thursday, as well as the monthly non-farm employment report that attracted much attention on Friday.

Federal Governor Waller again called for a rate cut this month on Wednesday, saying the rate at which the Fed can reduce borrowing costs after this meeting will depend on the next step of the economy.

At the same time, Fed Director Cook elaborated in more detail on Tuesday about her reasons for opposing President Trump’s removal. Trump has repeatedly criticized Fed Chairman Powell for not cutting interest rates this year. "The growing concerns about the independence of the Federal Reserve have further weakened trust in dollar-denominated assets and prompted investors to turn to gold," said Peter Grant, vice president and senior metals strategist at ZanerMetals. "Gold still has room for upside, with a short- to medium-term target of about $3,600 to $3,800, and the breakout pattern suggests that gold prices may reach $4,000 by the end of next quarter."

Spot silver rose 1.1% to $41.34 per ounce, the highest since September 2011, driven by gold's rally.

Platinum rose 2.2% to $1,434.17 per ounce, while palladium rose 1.8% to $1,155.05 per ounce. Oil market

Oil prices fell nearly 3% on Wednesday, and the OPEC+ Oil-producing Countries Alliance will hold a meeting over the weekend and are expected to consider increasing oil production targets again in October.

Brent crude oil futures fell 2.23%, with a settlement price of $67.60 per barrel. U.S. crude oil futures fell 2.47%, with a settlement price of $63.97 per barrel.

Eight OPEC+ member states will consider further boosting oil production at their meeting on Sunday, and the alliance is seeking to regain market share, two people familiar with the matter said.

Phil Flynn, senior analyst at PriceFuturesGroup, said the possibility of increased production has increased before the OPEC+ meeting. Traders had previously expected the league to maintain its current stance.

Another increase in production will mean that OPEC+ will begin to lift the second-tier production cut plan, which will reduce production by about 1.65 million barrels per day, accounting for 1.6% of the world demand, and the lifting time is more than a year ahead of the original plan.

The alliance has previously agreed to increase its production target from April to September by about 2.2 million barrels per day, and also raises the UAE's production quota by 300,000 barrels per day.

Soft economic data also put pressure on oil prices. Data released by the U.S. Department of Labor on Wednesday showsIn July, the number of job vacancies measured by labor market demand fell more than expected to reach 7.181 million. The number of economists surveyed by Reuters was previously expected to be 7.378 million.

Foreign exchange market

The dollar fell against the yen and Swiss franc on Wednesday after previous economic data showed weak labor market conditions, supporting investors' expectations for the Fed to relax monetary policy.

The U.S. Department of Labor said Wednesday that job vacancies measuring labor market demand fell to 7.181 million in July, a drop of more than expected. Economists surveyed by Reuters had previously expected 7.378 million job vacancies on JOLTS data.

Moneycorp's North American structural director Eugene Epstein said that as the Federal Reserve focuses on the job market, the dollar will continue to weaken sharply if the data continues to show that labor market conditions worsen. Epstein said Fed Chairman Powell was dovish about the job market at the Jackson Hall meeting, with previous non-farm employment data weak and JOLTS data weak, and if Friday’s job data were weak, it would be a big dovish situation, "it’s hard to see any option, especially given the current political relationship between the Fed and the current U.S. government."

After the data was released, the dollar erased earlier gains against the yen and the Swiss franc. The dollar fell 0.2% against the yen to 148.09 yen; the dollar fell 0.06% against the CHF to 0.8042. The euro's gains against the dollar expanded. It rose 0.14% to $1.165,850 in late trading.

After the employment data were released, U.S. Treasury yields fell. The yield on the two-year Treasury bonds, which usually moves in conjunction with Fed rate expectations, fell 4.3 basis points to 3.615%. The benchmark U.S. 10-year Treasury yield fell 6 basis points to 4.217%.

The dollar index, which measures the dollar exchange rate against a basket of goods, fell 0.24% to 98.165.

After the sharp drop in UK government bonds, the pound rose against the US dollar. In the UK Treasury market, the cost of 30-year borrowing in the UK has risen to its highest level since 1998. The pound appreciated 0.38% to $1.3442. The euro fell 0.15% against the pound to 0.8675.

Japan's 30-year Treasury bond yield hit a record high on Wednesday, further pressuring the yen. Yuu Nagamoriyama, the secretary-general of Japan's ruling Liberal Democratic Party and Prime Minister Shigeru Ishiba, announced his resignation.

International News

The probability of the Federal Reserve cutting interest rates in September is 96.6%

According to CME's "Feder Observation": the probability of the Federal Reserve maintaining interest rates unchanged in September is 3.4%, and the probability of a 25 basis point cut is 96.6%. The probability of the Federal Reserve keeping interest rates unchanged in October is 1.6%, the probability of a cumulative interest rate cut of 25 basis points is 46.8%, and the probability of a cumulative interest rate cut of 50 basis points is 51.6%.

The Trump administration has been sanctioned illegally for freezing grants to Harvard

U.S. District Judge Alison Burroughs, a Boston District Judge, ruled on the afternoon of September 3 local time that the Trump administration's freezing of $2.2 billion in funding for Harvard University is illegal and no longer allowed to cut off the support for scientific research funding for Harvard University. Previously, Burroughs also banned the Trump administration from suspending Harvard's qualification to recruit international students in another lawsuit. In April this year, the Trump administration announced the freeze of a total of $2.2 billion in multi-year grants to Harvard University and $60 million in multi-year contract payments. For months, the Trump administration and Harvard University have been negotiating to resume research funding. Harvard University filed a lawsuit in federal court over the freezing of funds by the Trump administration, requesting a judge to make a ruling on the lawsuit before September 3. Previously, Trump had claimed that Burroughs had "systematically taken over several Harvard-related cases" and questioned why the "Trump-hate" judge tried these cases. Trump has also said that as long as the judge makes an adverse ruling, the federal government will appeal immediately and will stop providing billions of dollars to Harvard University.

Federal Beige Book: Economic activity in most jurisdictions has almost no change. Prices have risen in all regions

The Federal Reserve Beige Book report shows that economic activity in most parts of the United States in recent weeks has "little or no change." “Most of the reports in the 12 jurisdictions have reported little or no changes in economic activity since the last Beige Book,” the report released Wednesday reads. “In each jurisdiction, contacts reported flat to declines as many residents’ wages failed to keep up with the pace of price increases.” The Beige Book said prices rose in all regions, with 10 of which reported inflation “moderate or gentler” and two other jurisdictions reported “strong growth in input prices.” “Almost all jurisdictions have mentioned tariff-related price increases, and contacts in many jurisdictions have reported particularly significant impacts on input prices,” the report said.

The Thai House of Parliament will elect a new prime minister on the 5th

On September 3 local time, the Thai House of Parliament issued a notice to all members of parliament that the meeting on Friday (September 5) will add agenda and will elect the prime minister in accordance with the provisions of the Thai Constitution. On August 29, the Thai Constitutional Court ruled that Petton, who was suspended from his post as prime minister, violated relevant provisions of the Constitution, and removed him from his post as prime minister. The Thai Prime Minister's Office issued a notice on the 30th saying that the cabinet held a special meeting on the same day to approve the appointment of Vice Prime Minister and Minister of the Interior Putan to continue as acting prime minister. According to the Thai Constitution, when the position of prime minister is terminated, all cabinet members must step down together, and the House of www.xmniubi.commons will be responsible for electing a new prime minister. Acting Prime Minister Putan will lead the rest of the cabinet to continue to perform guardianship duties until the new cabinet takes office.

Survey shows that OPEC crude oil production rose in August, Saudi Arabia contributed more than half of it

The latest survey results show that the Organization of Petroleum Exporting Countries (OPEC) and its allies continue to recoverThe resumption of production has driven OPEC's crude oil production to rise last month. OPEC increased production by 400,000 barrels per day, basically in line with the plan, bringing daily production to 28.55 million barrels. Saudi Arabia, the leader of the organization, contributed more than half of the increase in production. Saudi Arabia increased crude oil production by 230,000 barrels per day to 9.6 million barrels in August. Although this is the largest increase among OPEC's 12 member states, it is still below the 9.756 million barrels per day the organization's agreement allowed the country to reach.

A U.S. jury ruled: Google violated the privacy of nearly 100 million users

A U.S. jury ruled that Google violated the privacy rights of nearly 100 million Google users, who requested not to track their account data. An eight-person jury in San Francisco found that Google deceived users on a privacy switch in user account settings that allegedly prevented the www.xmniubi.company from collecting user data in third-party apps. Google will continue to save even if the user turns on the privacy switch. The jury found that the www.xmniubi.company copied their data in violation of California's privacy laws. The jury found Google was responsible for privacy violations and privacy violations, but did not violate California's www.xmniubi.computer Fraud and Abuse Act.

Domestic News

Foreign capital increases investment in China's capital market opening up to the outside world is accelerating

It is optimistic about Chinese assets and foreign capital increases investment. The latest data from the China Securities Regulatory www.xmniubi.commission shows that as of the end of July, the number of qualified overseas investors (QFIIs) has reached 900, with 40 new ones since the beginning of this year. The China Securities Regulatory www.xmniubi.commission stated that more reform measures will be introduced to optimize the system of qualified overseas investors in the future, effectively promoting high-level institutional opening of the capital market. Market insiders analyzed that judging from the policy signals revealed by the symposium of experts and scholars for capital market planning recently held by the China Securities Regulatory www.xmniubi.commission, the new round of capital market reform and opening up is expected to accelerate. Further improving the convenience of cross-border investment and financing, further optimizing access management, investment operations and other measures are worth looking forward to, and foreign institutions are expected to invest more "votes of confidence" in the Chinese market.

The Ministry of Finance and the People's Bank of China jointly held the second group leader meeting

Recently, the Ministry of Finance and the People's Bank of China jointly held the second group leader meeting. Liao Min, member of the Party Leadership Group and Deputy Minister of the Ministry of Finance, and Zou Lan, member of the Party www.xmniubi.committee and Vice President of the People's Bank of China, attended the meeting and delivered speeches. The meeting fully affirmed the achievements made by the joint working group since the establishment of last year and conducted in-depth discussions on issues such as financial market operation, government bond issuance and management, central bank treasury bond trading operations and improvement of offshore RMB treasury bond issuance mechanism. Both sides agreed that the coordinated efforts of fiscal policy and monetary policy provide strong guarantees for coping with the current www.xmniubi.complex and changing market environment and promoting the sustained recovery and improvement of the economy. In the next step, we must continue to actively play the role of the joint working group mechanism of the Ministry and the Bank, deepen cooperation, strengthen coordination, and continue to promote the stable and healthy development of my country's bond market, and jointly ensure the better implementation of fiscal and monetary policies. Responsible persons from the Ministry of Finance and the relevant departments and bureaus of the People's Bank of China participatedMeeting.

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