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[Market Morning] US Recession Spurred Gold’s Rebound to Break Through 1760, US Stocks and Bonds Recorded Their Best Monthly Performance Since 2020 in July, US Oil Supply Rose to 20 Million Barrels Per Day, and WTI Crude Oil Rose 4% Before Falling Back
In early Asian trading on August 1, the US dollar was trading around 105.88. After a series of mixed economic data was released last week, investors' worries about a recession temporarily exceeded their worries about inflation; rising safe-haven demand boosted the Gold traded higher for the week, hitting its highest level in nearly a month, while oil prices edged higher on Friday as investors turned their attention to this week's OPEC+ meeting and waning expectations that the group would soon increase supply.
On Friday, spot gold fluctuated widely, breaking through the 1760 mark, and finally closed up 0.58% at US$1,765.22 per ounce; after spot silver broke through and stepped back to the US$20 mark many times, it finally closed up 1.7% at US$20.32 per ounce.
Comment: Gold hit a fresh multi-week high on Friday, and the dollar pared its initial gains after data showed US inflation jumped again, adding to gold's safe-haven appeal, and the current price range appears to be attracting buying. US consumer spending rose more than expected in June. The month-on-month price increase was the largest since 2005. After the data was released, the dollar quickly pared back small gains and fell 0.3% at the end of the session, pushing gold to expand gains.
Suggestion: long spot gold 1762.80 positions, target point 1783.40
The US dollar index fluctuated violently during the session. After dropping to the lowest point of 105.55, the US dollar rebounded more than 100 points before the market, then fell back, failed to hold the 106 mark, and finally closed down 0.311% at 105.85; the 10-year US bond yield fell below The lowest level since April 8, and finally closed at 2.658%.
Comment: The US dollar hit a three-week low in choppy trading on Friday. After a batch of mixed economic data, investors' worries about a recession temporarily outweighed those about inflation; analysts said there are also many position adjustments at the end of the month. Earlier, US economic data showed that inflation remained stubbornly high in June, leaving the Federal Reserve likely to aggressively raise interest rates if it deems necessary.
Suggestion: short position of EUR/USD 1.02190, target point 1.01460
In terms of crude oil, the two oil prices rose and fell. After WTI crude oil broke through the US$100 mark and rose by 4%, the increase narrowed and finally closed up 1.75% at US$98.28 per barrel; Brent crude oil closed up 1.9% at 103.76 USD/barrel.
Comment: Oil rose more than $3 on Friday as attention turned to this week's OPEC+ meeting and waning expectations that the group would soon increase supply. The two major crude oil benchmarks were set for weekly gains but set for a second straight monthly decline, with Brent down around 4% in July and US crude down nearly 7%.
Suggestion: US crude oil long at 97.100; the target point is 100.560
US stocks opened higher and moved higher; the Dow closed up 0.97%, the Nasdaq Composite and the S&P 500 closed up 1.88% and 1.42%, respectively. Oil and gas, solar, and infrastructure sectors led gains. Amazon closed up 10.4% after the results. In July, the Nasdaq rose 12.35%, the largest monthly gain since April 2020, the S&P rose 9.11%, and the Dow rose 6.73%, both recording the largest monthly gain since November 2020. The 10-year US Treasury yield fell by 36.42 basis points in July, the largest monthly decline since March 2020.
Comment: US stocks extended their recent gains on Friday, with the S&P 500 and Nasdaq posting their biggest monthly percentage gains since 2020, after Apple and Amazon released upbeat earnings expectations.
Suggestion: Long Nasdaq index 12898.900, target point 13527.100.
US President Biden tests positive for new coronavirus again, re-isolates.
Biden tweeted that "this only happens to a small number of people" and that he "has no symptoms" and is feeling well. In addition, he also said, "For the safety of the people around me, I need to isolate. I am still working and will start again soon." According to the New York Times, the Biden administration plans to provide an updated booster shot of the new crown vaccine in September.
PCE beats expectations; Bostic says 'more will have to be done.'
The US core PCE price index recorded an annual rate of 4.8% in June, slightly exceeding the expected 4.7%. The US PCE price index recorded a monthly rate of 0.6% in June, the largest increase since May 2021. Inflation has become the biggest problem for the US economy, and Atlanta Fed President Bostic said the central bank "will have to do more" on interest rates, but the details depend on data in the coming months. Also, he thinks the US is still some way away from a recession, but widespread fears of a recession could actually lead to one.
US confidence index remains second-lowest in July, and long-term inflation expectations weigh on consumer confidence.
The final value of the University of Michigan's consumer confidence index in July was recorded at 51.5, and the expected 51.1, still the second lowest in history; the June data was revised up from a historical low of 50 to 51.5; the expected index this month fell from 47.5 in June. 47.3, the lowest since 1980; long-term inflation expectations were revised up from 2.8% to 2.9%, hovering near an 11-year high, weighing on consumer confidence.
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