On Thursday, June 27th, in the early trading session of the Asian market, spot gold fluctuated narrowly below the 2300 level and is currently trading around $2298.02 per ounce. Gold prices fell 1% on Wednesday, hitting the lowest level of $2293.51/ounce in more than two weeks and closing at $2297.96/ounce, which was affected by the strengthening of the US dollar and the rise in treasury bond bond yields, while traders waited for the US inflation data to be released later this week.

Bart Melek, head of commodity strategy at Dao Ming Securities, said, "Currently, the market is likely responding to a strengthening US dollar, and we continue to digest the possibility that the Federal Reserve/FED is unlikely to adjust (interest rates) in the early summer."

The US dollar rose 0.4% on Wednesday, hitting a nearly two month high of 106.13 and closing at 106.05, making gold more expensive for investors holding other currencies. The yield of US 10-year treasury bond bonds also rose to a two-week high.

Federal Reserve Governor Bauman stated on Tuesday that keeping policy interest rates unchanged for a period of time may be sufficient to control inflation, but reiterated his willingness to raise borrowing costs if necessary.

New home sales in the United States fell to a six month low in May, lower than expected. According to data from the Ministry of Commerce, new home sales in May plummeted by 11.3% month on month, with an annual rate of 619000 units adjusted for seasonal factors. The US dollar has had a mediocre response to this data, while increasing evidence suggests that the world's largest economy is slowing down.

The next focus of the market will be on Friday's release of the US Personal Consumption Expenditure (PCE) Price Index, which is the Federal Reserve's preferred inflation indicator. Investors hope to understand whether price pressures in the economy are moving in the right direction. If the data falls below expectations, it may encourage investors to increase their bets on this year's interest rate cut, thereby easing the pressure on the yen to some extent.

"Compared to CPI (Consumer Price Index), PCE data is unlikely to experience significant fluctuations," said Eugene Epstein, North American Structural Director at Moneycorp in New Jersey. "Nevertheless, the PCE needs to undergo significant changes in order to change the dynamics of interest rate cuts."

The yield of US treasury bond bonds rose on Wednesday, and inflation in other countries rebounded. The market worried that the Japanese authorities would take intervention measures to boost the yen and liquidity at the end of the month.

Data released on Tuesday showed that Canadian inflation was higher than expected, which boosted the yield of US treasury bond bonds. On Wednesday, it was Australia's turn, and consumer inflation in May accelerated to a six month high, catching traders off guard. The market believed that there was an increased possibility of another interest rate hike this year.

In the absence of important US economic data on Wednesday, yields rose before the government issued $70 billion of five-year treasury bond bonds, which was part of the Treasury Department's $183 billion treasury bond bond auction this week. However, analysts stated that in the end, the auction received steady demand with a winning interest rate of 4.331%, lower than the yield of the secondary market at the bidding deadline, indicating that investors are willing to pay a premium.

"Many investors are trying to participate in auctions because it's a way to add some bonds to their books without actually facing liquidity constraints," said Gennady Goldberg, head of US interest rate strategy at Dao Ming Securities

The yield of five-year treasury bond rose after the auction, rising 8 basis points at the end of the day to 4.339%.

The Japanese yen has fallen to its lowest level against the US dollar since 1986, raising concerns in the market that the Japanese authorities will intervene again to boost the yen.

Goldberg said, "The market is a bit concerned that Japan will have to sell US bonds to intervene in the foreign exchange market, which will push up yields a bit."

At the same time, as the end of the month and quarter approaches, the liquidity of the money market may face challenges as traders settle their accounts, putting pressure on US bonds.

Subadra Rajappa, head of US interest rate strategy at Societe Generale, said, "People are a bit concerned about the end of month repurchase (repurchase agreement) situation, there may be some pressure there."

On Wednesday, futures contract traders linked to policy interest rates bet that a total of 44 basis points of interest rate cuts will be made in 2024. The personal consumption expenditure (PCE) price index on Friday will be a key factor for investors to evaluate the magnitude of this year's interest rate cut.

The yield of 10-year treasury bond rose about 8 basis points on Wednesday to 4.316%%; The 30-year treasury bond bond yield rose 7 basis points to 4.447%% on Wednesday. The yield of two-year treasury bond, which often better reflects the expectations of monetary policy, rose nearly two basis points on Wednesday to 4.749%.

The annual "stress test" results released by the Federal Reserve on Wednesday show that large US banks will have enough capital to withstand severe economic and market turbulence, but due to higher portfolio risks, these banks will face greater hypothetical losses this year.

The test results show that 31 major banks will withstand the test of a sharp rise in unemployment rates, severe market fluctuations, and a sharp decline in the residential and commercial mortgage markets, and still have enough capital to continue lending.

Investors still need to pay attention to geopolitical news. The Syrian military issued a statement early on the 27th, stating that multiple locations in southern Syria were hit by Israeli airstrikes late at night on the 26th, resulting in 2 deaths and 1 injury.

The statement stated that at around 23:40 local time on the 26th, Israel launched airstrikes on multiple locations in southern Syria from the direction of the occupied Golan Heights, and Syria's air defense system shot down some missiles launched by the enemy. The air raid resulted in 2 deaths, 1 soldier injured, and some material damage.

However, a senior US official said on Wednesday that a senior aide to US President Biden told the visiting Israeli Defense Secretary this week that Washington is continuing to suspend the delivery of heavy bombs to Israel and is currently reviewing the issue.

The official, speaking to reporters about the meeting between US National Security Advisor Jake Sullivan and Israeli Defense Secretary Yoav Gallant, said that the allies are still discussing this powerful batch of ammunition. Biden suspended the transportation of this batch of ammunition in May due to concerns that it could cause more Palestinian civilian deaths in Gaza.

It should be noted that the market is also concerned about the release of the US Q1 Gross Domestic Product (GDP) data on Thursday, as well as the important debate between President Biden and Republican presidential candidate Trump on Thursday. In addition, pay attention to the changes in the number of US initial jobless claims and the monthly rate of durable goods orders in May.