[Market Morning] Market Recession Worries Are Rising, Gold Is Approaching the 1720 Level, and the US Index Is Back Below 110

On Wednesday, spot gold fluctuated upwards, approaching the $1,720 mark, and finally closed up 1.01% at $1,718.41 per ounce; spot silver stood at the $18 mark and finally closed up 2.22% at $18.45 per ounce.

Comment: Gold prices rebounded on Wednesday, and as the dollar fell slightly from a 20-year high, low-sucking buying appeared, but expectations of aggressive interest rate hikes still cloud the prospect of gold. The U.S. dollar index hit a 20-year high at one point, but the U.S. dollar has since retreated slightly, seemingly giving gold some respite.

Suggestion:  short Spot gold at 1716.60; the target point is 1699.60

The U.S. dollar index fell below the 110 mark and finally closed down 0.61% at 109.59; the 10-year U.S. Treasury yield fell below 3.3%.

Comment: The dollar hit a 24-year high against the yen and a 37-year high against the pound on Wednesday, Japan sticks to a dovish monetary policy, and Europe faces economic problems, in stark contrast to a relatively strong U.S. economy and a hawkish Fed determined to drive inflation down to the target level of 2%.

Suggestion: short EUR/USD at 0.99930 position, target point 0.99110

In terms of crude oil, affected by the intensification of economic recession fears and the unexpectedly large increase in API crude oil inventories, WTI crude oil fell by more than 6%. , at $81.64 per barrel; Brent crude oil fell below the psychological mark of $90 per barrel in the session and finally closed down 5.5% at $88.88 per barrel.

Comment: Oil prices fell sharply on Wednesday, dipping below levels seen before the conflict between Russia and Ukraine, as gloomy economic data added to investor fears of recession risks.

Suggestion: short U.S. crude oil at 81.660 position, target point at 79.600

U.S. stocks closed up across the board; the Dow closed up 1.4%, the Nasdaq Composite and the S&P 500 closed up 2.14% and 1.83%, respectively. Clean energy and social media sectors performed strongly. Netflix closed up 4.8%, and Apple closed up nearly 1%.

Comment: The last time the Nasdaq, S&P 500, and Dow Jones Industrial Average posted large one-day percentage gains was August 10. Still, investors are skeptical that this is a long-term trend. The tech-heavy Nasdaq led gains among the major indexes, snapping a seven-day losing streak.

Suggestion: go short at 12259.800 of the Nasdaq index, target point at 12041.100

Bank of Canada raises benchmark interest rate to 3.25%

The Bank of Canada announced on September 7, local time, that it would raise its benchmark interest rate by 75 basis points to 3.25%. The benchmark rate has reached its highest level since 2008 in Canada. Since March 2 this year, the Bank of Canada has continuously raised interest rates to deal with persistent inflation. In March, it announced a 25 basis point interest rate hike, and in April and June, the benchmark interest rate was raised to 1.5% after announcing a 50 point interest rate hike. It announced a 100 point interest rate hike in July to raise the benchmark interest rate to 2.5%.

Ukraine's National Security and Defense Council imposes sanctions on more than 600 Russian officials.

The Ukrainian State News Agency reported on the 7th that Ukrainian President Volodymyr Zelensky said in a routine video speech on the evening of the 7th that the National Security and Defense Council of Ukraine made an important decision that day to impose sanctions on 606 people in Russia, including 28 members of the Russian Federal Security Council, 154 members of the Russian Federation Council (upper house of parliament) and 424 representatives of the Russian State Duma (lower house of parliament).

Germany's coal-fired power plants account for a significant increase in the share of electricity.

According to the latest report released by the German Federal Statistics Office on the 7th, affected by the energy crisis, in the first half of 2022, the share of electricity supplied by coal-fired power plants in Germany reached 31.4%, a year-on-year increase of 4.3%. According to the report, the share of wind power and photovoltaics has also increased, with all renewables accounting for 48.5% of total power generation, an increase of 4.7% compared to the same period last year. The natural gas power generation proportion dropped significantly, accounting for only 11.7%. The share of nuclear power generation also fell to 6% from 12.4% a year ago. Overall, Germany's total electricity produced and connected to the grid in the first half of the year was 263.2 billion kWh, a year-on-year increase of 1.3%.