At the beginning of the Asian market on Tuesday (September 3), spot gold hovered below the 2500 mark and is currently trading around $2498.11 per ounce. Due to the strengthening of the US dollar, gold prices fell to their lowest point in over a week around 2489.90 on Monday, but then fluctuated and rebounded to around $2507.19, closing at $2499.36 per ounce. The market's focus has shifted to a series of economic data to be released this week, in search of clues about the magnitude of the Fed's September meeting rate cut.

On this trading day, the August ISM Manufacturing PMI for the United States will be released, and investors need to pay close attention. Additionally, it is necessary to continue monitoring news related to the geopolitical situation.

Due to the holiday closure in the US market, overall trading was relatively light on Monday.

UBS analyst Giovanni Staunovo said, "In order for gold prices to rise, we need to be more clear on whether to cut interest rates by 25 basis points or 50 basis points. Perhaps by the end of this week, with the release of employment data, we will be more clear on this aspect

The US economic data to be released this week include the Institute for Supply Management (ISM) Non Manufacturing PMI survey, JOLTS job vacancies, ADP private sector employment, and non farm payroll reports.

The market generally expects the Federal Reserve to cut interest rates at its meeting on September 17-18, marking the first rate cut in this policy cycle.

According to the CME FedWatch Tool, investors currently believe that there is a 69% chance of a 25 basis point rate cut in September, and a 31% chance of a 50 basis point rate cut.

Mike Ingram, a market analyst at Kinesis Money, said in a report that with the earnings season now largely over and the Fed's September 18 rate cut almost certain, investors still seem satisfied with continuing to long gold, despite the recent strengthening of short-term interest rates and the US dollar. Higher geopolitical risks and diversified investment portfolios remain additional supporting factors

The US dollar is hovering around the two-week high it hit earlier in the session, making gold more expensive for holders of other currencies. Investors are shifting their focus to the US employment report to be released at the end of this weekend.

The US non farm payroll report to be released on Friday will be crucial as Federal Reserve Chairman Powell shifts focus from fighting inflation to preventing job losses.

Analysts say that employment data will determine the magnitude of the Federal Reserve's expected interest rate cuts. For weeks, the market has digested the possibility of a 25 basis point interest rate cut.

As the inflation data showed that the interest rate cut would be small, the yield of long-term US treasury bond bonds rose to the highest level since the middle of August. Boosted by this, the dollar rose to the highest level since August 20 earlier Monday, ending at 101.79. Due to the market's expectation of a 50 basis point interest rate cut by the Federal Reserve in September cooling down, the US dollar and US Treasury yields continue to rebound, and gold prices face further downside risks in the short term.

The US Gross Domestic Product (GDP) data also indicates that the economic foundation is sufficiently stable, giving the Federal Reserve room to be less aggressive in relaxing policies.

Recently, everything has been related to economic data, "said Athanasios Vamvakidis, Global Head of Foreign Exchange Strategy at BofA." We expect the US dollar to weaken in the second half of this year, but the market should not be too excited about it, "he added, pointing out that the target price for the euro is $1.12. The US economy is slowing down, but it is still much better than other regions in the world

Analysts say that Monday's US public holiday has led to a slow start to the US dollar trend this week, but there will be a series of macroeconomic data releases in the following days, with Friday's non farm payroll data reaching its peak.

Economists surveyed by Reuters predict that non farm payroll jobs in the United States will increase by 165000 in August, up from 114000 last month.

Analysts say that the data is close to the predicted value, consistent with a soft landing and the Federal Reserve's 25 basis point policy easing this month.

BofA's Vamvakidis said, 'If the data is 100000 or below, we will see the risk of a hard landing, and the market expects a higher possibility of a 50 basis point rate cut.'.

Due to the public holiday in the United States, US Treasury bonds were not traded on Monday, but the 10-year yield remained at 3.9110% after rising 4.4 basis points last Friday; In the morning trading of Asian market on Tuesday, the yield of US treasury bond bonds 10 years ago was 3.928%, the highest in nearly two weeks.

In terms of geopolitical situation, it still attracts some safe haven buying to support gold prices, but it still depends on the progress of the situation.

On Monday, the Ukrainian military announced that its air defense forces had shot down about 20 Russian launched cruise and ballistic missiles, which were aimed at Kiev.

The Ukrainian Air Force stated that in Russia's morning attack, Ukraine shot down 22 out of 35 missiles and 20 drones.

Hamas claimed responsibility for two car bombings targeting Israelis in the West Bank over the weekend.

On September 2nd local time, the Israel Defense Forces announced that approximately 30 rockets were fired from the direction of Lebanon towards northern Israel, causing no casualties. On the same day, the Israeli army launched an airstrike on the military facilities of Hezbollah in Mayr Keba, southern Lebanon.

Lebanon's Hezbollah announced on the 2nd that it launched multiple rockets at three Israeli settlements that day. In addition, the Lebanese Ministry of Health announced on the 2nd that the town of Khiam in southern Lebanon was attacked by Israeli army white phosphorus bombs that day, and a Lebanese citizen was urgently taken to the hospital for treatment.

On September 2nd, the Israeli Defense Forces announced that on the evening of September 1st local time, the Israeli Air Force launched attacks on Hezbollah armed military buildings in five areas of southern Lebanon.

According to a report from the Lebanese Ministry of Public Health on September 2nd, a car in southern Lebanon's Naqurah was attacked by an Israeli drone, resulting in two deaths. According to Lebanese media, the car that was attacked belongs to a company that provides services to the United Nations Interim Force in Lebanon. However, this statement has not yet received a response from the United Nations Interim Force in Lebanon and the Israeli military.

Senior Israeli sources said that US President Biden exerted pressure on Israeli Prime Minister Netanyahu, which is noteworthy because Netanyahu has agreed to the US proposal, while Hamas leader Shinwar continues to oppose any agreement.