[Market Morning] US GDP Data Triggers Recession Debate, Biden Yellenzi Speaks Out, Gold Stands at 1750 Mark, Silver Surges More Than 4%

After the US GDP data was released on Thursday, spot gold rose in the short-term and then continued to rise, breaking through the 1750 mark, and finally closed up 1.29% at $1,755.8 per ounce; spot silver rose strongly, hitting the $20 mark at one point, and finally closed up 4.49 % at $19.99 an ounce.

Comment: Gold rose nearly 1.3% on Thursday as a shrinking US economy boosted its safe-haven appeal and a less aggressive tone from the Federal Reserve chairman pushed prices to extend gains. The US economy unexpectedly shrank in the second quarter, with consumer spending growing at the slowest pace in two years and business spending falling, potentially fueling fears that the economy is already in recession.

Suggestion: long spot gold 1755.20 positions, target point 1780.10

The US dollar index continued to fall, testing the support of the 106 mark many times, and finally closed down 0.28% at 106.18; the 10-year US bond yield fell below 2.7% and finally closed at 2.671%. The dollar tumbled 1.6% against the yen on Thursday, its biggest one-day drop since March 2020.

Comment: The dollar slipped 0.1% against a basket of major currencies to 106.25 on Thursday; the dollar fell to a six-week low against the yen on Thursday, tracking losses in US bond yields after data showed the US economy shrank again in the second quarter, fueling growth This has led to speculation that the Fed will not raise rates as aggressively as previously expected.

Suggestion: short position of EUR/USD 1.01920, target point 1.01130

In terms of crude oil, the two oil prices rose and fell on Thursday. WTI crude oil tested unsuccessfully to break through the $100 mark. It fell to $96.04 within the day and finally closed down 0.9% at $97.28 per barrel; Brent crude oil closed down 0.03% at $107.09 /bucket.

Comment: Oil prices were mixed on Thursday as concerns that a possible global recession would hit energy demand offset a drop in US crude inventories and a rebound in gasoline consumption.

Suggestion: go short at 96.490 of US crude oil, target point at 92.470

The three major US stock indexes rose across the board, the Dow closed up 1.37%, and the Nasdaq closed up 1.08%. Big tech stocks rallied across the board. Apple rose 3.42%, Amazon rose 5.37%, Netflix rose 6%, Google rose 7.66%, Facebook rose 6.55%, and Microsoft rose 6.69%.

Comment: US stocks rebounded for a second day on Thursday, with all three major indexes up more than 1%, as data showed the economy shrank for a second straight quarter, sparking speculation among investors that the Fed may not need to be as aggressive as some feared rate hike.

Suggestion: Long position of Nasdaq index 12863.800, target point 13038.700

Biden says the US is not in recession; the chip bill may pass.

After the GDP data was released, US President Biden said in a speech that the US is not in a recession, the job market is at its strongest in history, and consumer spending continues to grow. Noting that the economy is slowing as the Fed moves to lower inflation, Biden noted that the economic plan is now focused on lowering inflation, urging passage of the chip bill. According to market sources, the US House of Representatives has enough votes to pass the chip bill.

Yellen worries about the dollar's global outlook and sees inflation likely to fall in the coming days.

US Treasury Secretary Yellen said that data showing US GDP shrinking for two consecutive quarters does not prove that the US is currently in a recession and that there is currently no significant economic and employment slowdown. Don't just look at the overall GDP data. She reiterated that inflation is still too high and that reducing it is the government's top priority, but there are signs that inflation is likely to fall in the coming days, and the Fed is doing the right thing to curb it. In addition, she said she is concerned about the global outlook for the US dollar.

A number of economic data in the United States are worse than expected, and it has entered a "technical recession."

The number of people applying for unemployment benefits in the United States in the week to July 23 recorded 256,000, a new high since the week of November 13, 2021; the initial value of the annualized quarterly rate of real GDP in the second quarter of the United States recorded -0.9%, which was It recorded a negative value for the second consecutive quarter; the initial value of the quarterly rate of actual personal consumption expenditures in the second quarter of the United States was 1%, slightly lower than the expected 1.2%. The agency believes that the second consecutive quarterly decline in GDP meets the standard definition of a technical recession, and the risk of an economic downturn has increased.