[Market Morning] The Fed May Continue to Raise Interest Rates by 75 Basis Points Next Month, the Conflict Between Russia and Ukraine Has Not Eased, and Gold Fluctuates Downward

On Tuesday, spot gold fluctuated downward and finally closed down 0.29% at $1,833.03 per ounce; spot silver rose in the European session, pared some gains during the US session, and finally closed up 0.51% at $21.69 per ounce.

Comment: Gold prices were range-bound on Tuesday, with rising US Treasury yields and aggressive rate hike bets denting gold's appeal despite a pullback in the US dollar. "A little higher Treasury yields and a small rebound in US equities all put some pressure on gold," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago. "However, the dollar's decline provided some support." The benchmark 10-year US Treasury note rose, and the dollar index fell 0.3 percent, making dollar-denominated gold more attractive to overseas buyers.

Suggestion: short spot gold at 1830.80, and the target point is 1807.00.

The US dollar index once fell below the 104 mark during the European session. During the US session, it regained some lost ground and closed down 0.067% at 104.44; the 10-year US Treasury yield opened higher, fluctuated, and is still over 3.2%.

Comment: The dollar surged to its highest level against the yen since October 1998 on Tuesday, as the Bank of Japan's ultra-loose monetary policy contrasted sharply with an aggressive Federal Reserve determined to fight inflationary fires. USD/JPY broke past the old high of 135.60 and triggered stop-loss orders, taking it beyond the 136.0 mark.

Suggestion: long USD/JPY at 136.380, and the target point is 138.000.

Crude oil continued to fluctuate within a narrow range. WTI crude oil closed up 0.74% at $112.02 per barrel; Brent crude oil closed up 0.31% at $115.62 per barrel.

Comment: Oil prices rose on Tuesday as summer fuel demand surged, while supplies remained tight due to sanctions on its oil following the conflict between Russia and Ukraine. Both benchmark contracts posted weekly losses last week. It was the first weekly drop in eight weeks for US crude and the first in five for Brent.

Suggestion: long US crude oil at 108.540, and the target point is 112.420.

In the stock market, the three major U.S. stock indexes closed higher collectively, the Dow closed up 2.15%, the Nasdaq rose 2.51%, the Chinese concept stocks strengthened across the board, the Nasdaq China Golden Dragon Index rose 4.91%, new energy auto stocks did well, and Weilai rose. Over 9%, Xiaopeng and Ideal rose over 7%.

Comment: The market generally rebounded, with all 11 major sectors of the S&P 500 rising, and the benchmark stock index recorded its biggest weekly percentage drop since March 2020 last week. Investors are trying to gauge how far the stock market can fall, assessing the risks to the economy that the Federal Reserve could raise by aggressively raising interest rates to curb high inflation. Earlier this month, the S&P 500 fell more than 20% from an all-time high hit in January, confirming a bear market.

Suggestion: go short at 11531.700 of the Nasdaq index and target at 11037.000.

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