At the beginning of the Asian session on Tuesday (August 9), spot gold fluctuated in a narrow range, currently trading near $1787.29 / ounce, holding most of the overnight gains and once again approaching the 55-day moving average resistance. Economic data was smaller in the previous session, with a New York Fed survey showing a sharp drop in U.S. consumer inflation expectations for the next year and three years, and falling dollar and Treasury yields to provide support for gold prices; However, what provides more support to gold prices is geopolitical concerns; Technically, the short-term bullish signal of gold prices has increased, and it is expected to test the resistance near the 1800 mark.
There were relatively few data and risk events in the trading day, and we continued to pay attention to news related to the geopolitical situation; Focus on the change in market expectations for the US July CPI data, which will be released on Wednesday.
Edward Moya, senior analyst at OANDA, said: "The market seems to have absorbed the impact of the employment data... However, if we see the Fed tightening policy further sharply, gold will usher in a difficult period. Foreign investors will be looking for alternative investments, and given the geopolitical situation, gold is an option. ”
[Ukraine and Russia blame each other for shelling nuclear power plants, and the international community warns that fighting could lead to disaster]
Kiev and Moscow on Monday blamed each other for shelling the Zaporizhia nuclear power plant in Ukraine over the weekend, with the international community warning that their battle for control of the plant could spark disaster.
U.N. Secretary-General António Guterres called any attack on the plant "suicidal" and asked for U.N. nuclear inspectors to be given access to the Zaporizhia nuclear power plant, the largest nuclear facility in Europe.
Russian invading forces seized southern Ukraine, including Zaporozhye, in March when the facility was attacked but the nuclear reactor was not damaged. The region, including the city of Kherson, was now the target of the Ukrainian counter-offensive. Russia claims that special military operations are being carried out in Ukraine.
Ukraine calls for the demilitarization of the facility and the granting of access to the International Atomic Energy Agency (IAEA), the UNITED Nations nuclear watchdog. Russia also said it supported the agency's entry and accused Ukraine of trying to "hijack Europe" by shelling the facility and preventing the IAEA from entering.
Ukraine has accused Russia of attacking the plant over the weekend, which is still managed by Ukrainian technicians. Three radiation sensors were damaged and two workers were injured by shrapnel.
Dr Mark Wenman, a nuclear expert at Imperial College London, downplayed the risk of a major accident, saying zaporozhye's reactors were relatively robust and spent fuel was well protected.
Ukrainian ambassador to the IAEA, Yevhenii Tsymbaliuk, said the zaporozhye staff were "working under the barrel of a Russian gun."
Russia's defense ministry said the attack in Ukraine damaged the power lines that served the facility and forced the facility to shut down two reactors to "prevent disruptions," leading to a reduction in power generation. The facility has a total of six reactors.
Ukraine said it planned a large counteroffensive around Kherson and said it had retaken dozens of villages.
[The United States will provide another $4.5 billion in budget support to the Ukrainian government]
The U.S. Agency for International Development (USAID) said Monday it would provide an additional $4.5 billion to the Ukrainian government, which would boost the total amount of U.S. budget support to Ukraine since Russia's invasion in February to $8.5 billion.
USAID said the funds will be distributed in batches to the Ukrainian government through the World Bank, in coordination with the U.S. Treasury Department, with an initial disbursement of $3 billion in August.
Prior to that, the agency said it had provided $1.7 billion and $1.3 billion to Ukraine in July and June, respectively. Washington has also provided billions of dollars in military support and plans to provide another $1 billion in weapons support in the near term.
As the war continues, U.S. funding is designed to help the Ukrainian government maintain its basic functions, including social and financial assistance to the growing number of poor people, children with disabilities, and millions of internally displaced persons.
The agency said in a statement: "After Russia launched an unprovoked and unjustified war, the United States remains committed to supporting Ukraine and its people." ”
[The United States has handed over anti-radar missiles to Ukraine]
On August 8, local time, U.S. Deputy Defense Secretary Colin Carr said the United States had handed over some anti-radar missiles to the Ukrainian Air Force in an attempt to disrupt Russia's radar system. Karl did not disclose the number of these missiles and the timing of their handovers. It is also the first time the Pentagon has acknowledged the handover of such missiles to Ukraine. Another Defense Department official said the missiles were AGM-88 high-speed anti-radar missiles produced by Raytheon with a range of more than 48 kilometers.
[New York Fed Survey: U.S. Consumers' Inflation Expectations Fall Sharply in the Next Year and Three Years]
A survey released monday by the New York Fed showed that U.S. consumers' inflation expectations fell sharply for the next year and three years in July, suggesting fed officials are winning the battle to anchor price growth expectations in the battle to curb high inflation.
The median expectation for inflation in one year fell by 0.6 percentage points to 6.2 percent, and the expectation for prices in three years fell by 0.4 percentage points to 3.2 percent, the lowest levels since February and April, respectively.
In terms of expectations for the coming year, the expected decline was driven by a sharp decline in gasoline and food price growth expectations, with gasoline price growth expectations falling the second largest in the nine years since the survey was conducted, and the largest decline in food price growth expectations ever.
Inflation expectations are a key dynamic indicator that Fed policymakers are keeping a close eye on as they aggressively raise interest rates to contain price pressures at 40-year highs. Since March, the Fed has raised its policy rate by 225 basis points in search of a goal of restoring inflation to 2 percent.
The New York Fed's latest monthly consumer expectations survey results provide some encouragement that the situation is improving, even though consumer price indicator readings, which are expected to be released later this week, will still show that inflation has not eased.
The Labor Department's July consumer price index, which will release on Wednesday, is expected to show overall prices up 8.7 percent from a year earlier, down slightly from the previous month (9.1 percent) against the backdrop of lower gasoline prices. However, another key indicator that excludes energy and food price volatility is expected to accelerate to 6.1 percent, compared to 5.9 percent in June.
The New York Fed survey also showed that median household spending growth expectations fell for the second consecutive month from a record high in May, at 6.9 percent in July, the lowest level since February. The 1.5 percentage point decline was the largest since the series began, and household spending across age, education and income groups fell generally.
In the labor market, expectations of a higher unemployment rate in one year fell by 0.2 percentage points to 40.2 per cent, while the average perceived probability of job loss also decreased slightly. The average probability of quitting in the coming year rose from 18.6 percent in June to 19.5 percent in July. The high resignation rate is thought to reflect workers' confidence in the labor market.
【The dollar fell slightly on Monday, and US Treasury yields fell】
The dollar index edged back slightly on Monday, closing at 106.38, down about 0.2 percent, giving up some of the gains since Friday's U.S. jobs report, with a drop in inflation expectations slightly dampening expectations of further aggressive rate hikes by the Fed, though investors are still waiting for U.S. inflation data to be released on Wednesday for more clues about the Fed's next move.
U.S. jobs data released last week was stronger than expected, allaying fears that the economy was slipping into recession. Investors see the data as suggesting that the Fed may be more aggressive in raising interest rates in response to inflation. That optimism continued into Monday, when European stocks rose and North American stocks opened higher before falling back to near level in volatile trading, and investors' attention turned to corporate performance.
Erik Bregar, director of risk management for foreign exchange and precious metals at SilverGoldBull, said of this safe-haven dollar, "We have seen a general weakness in the dollar and risk sentiment quite high. ”
U.S. Treasury yields pulled back on Monday after a sharp rally on Friday, and Traders show traders see a 69% chance of a 75 basis point rate hike from the Fed at its September meeting.
Simon Harvey, head of European FX analysis at Monex, said: "The dollar pullback has not been accompanied by a dovish re-digestion of the US currency market, and the standard for a rebound in the dollar induced by the consumer price index (CPI) data appears to have been lowered today. ”
The yield on the 10-year Treasury note fell to 2.763 percent on Monday and peaked at 2.869 percent on Friday, its highest since July 22. The two-year Treasury yield was 3.216% in late trading, reaching 3.331% on Friday, the highest since June 16.
The spread between the two- and 10-year Treasury yields was negative 46 basis points, the worst inversion of the curve since 2000.
Fundamentals are bearish
There is no definitive bearish news in the gold market in the short term, but expectations for a 75 basis point rate hike by the Federal Reserve in September have risen sharply after last week's non-farm payrolls data, which may still limit the upside of gold prices.
In the face of a strong non-farm payrolls report, JPMorgan analyst Michael Ferroli now expects the Fed to raise rates by 75 basis points in September, compared to 50 basis points previously expected. Feroli said the data should ease recession fears but exacerbate fears that the Fed has more work to do, and now sees a high probability of a 75 basis point rate hike in September.
Analysts led by AlexRoever said in a note: "Friday's data should ease recession fears, but it will amplify concerns that the Fed still has a lot of work to do." ”
They also said rising wages would increase concerns about inflation. Average hourly earnings rose 0.5 percent in July after rising 0.4 percent in June. This led to a year-on-year increase in wages of 5.2 percent.
After-market look-ahead: The market is focused on us CPI data
The July Consumer Price Index (CPI), which will be released on Wednesday, will be the next important economic data. According to the median estimates of economists surveyed by Reuters, the data will show that prices are growing at a rate of 8.7% for the month.
Oscar Munoz, macro strategist at TD Securities, noted that Fed officials will increase their focus on inflation, and while the July CPI is expected to slow compared to June, the core CPI will remain strong on a month-on-month basis. In addition to inflation data, market participants may also be watching the preliminary U.S. University of Michigan Consumer Confidence Index in August, and the recent decline in gasoline prices and the rebound in the stock market are expected to lead to an improvement in market sentiment. Separately, Fed officials are expected to increase their focus this week on inflation and tightening labor markets, which remain their top concerns, not economic growth.
Robert Schchein, chief investment officer at BlankeScheinWealthManagement, said: "The Consumer Price Index (CPI) data will help confirm whether the Fed's tightening actions have been successful in starting to contain inflation or need to continue to tighten.
Mitsubishi Mfg currency analysts DerekHalpenny and Lee Hardman said in a note to clients: "Strong US economic data, coupled with hawkish statements by the president of the Regional Fed, encouraged market participants to downplay expectations of a dovish policy shift at the Fed, thereby supporting the dollar." ”
TimGraf, head of macro strategy for Europe, the Middle East and Africa at State Street, said high inflation, combined with Friday's labor market data, could push the market to fully absorb expectations for a 75 basis point Fed rate hike in September.
Benjamin Jeffery, interest rate strategist at BMOCapitalMarkets in New York, said: "I think the most important thing is wednesday's CPI data to determine how much (the Fed) will choose in September. Regardless, the jobs report was strong, adding to the 75 basis points of reason for a rate hike in September. ”
Overall, before the release of the US CPI data on Wednesday, the gold price may oscillate and run, slightly biased towards the resistance near the 1800 mark, and the upper band resistance on the Bollinger Bands is also near this position, but after the release of the US CPI data, the gold price may fall slightly and then shock upwards.
This article originated from Huitong Network