On Wednesday (July 24th) morning trading in the Asian market, spot gold remained above the 2400 mark and is currently trading around $2409.84 per ounce. Gold prices rose 0.55% on Tuesday, closing at $2409.39 per ounce, ending four consecutive days of decline. The decline in US home sales in June exceeded expectations, and US bond yields fell, providing support for gold prices; A survey shows that the Federal Reserve will cut interest rates twice this year, attracting bargain hunters to continue supporting gold prices. Investors are waiting for the release of US economic data later this week to further clarify the timing of the Federal Reserve's interest rate cuts this year.

Bart Melek, head of commodity strategy at TD Securities, stated that the market has shifted its focus from US politics to economic data, assuming we are likely to see interest rate cuts starting in September.

In a Reuters survey, an increasing number of economists believe that the Federal Reserve will cut interest rates twice this year.

According to the CME FedWatch Tool, the market expects a 96% chance of the Federal Reserve cutting interest rates in September.

This week's focus will be on Thursday's US Q2 Gross Domestic Product (GDP) report and Friday's latest Personal Consumption Expenditures (PCE) price index, which is the Federal Reserve's preferred inflation indicator.

At the same time, India has lowered import tariffs on gold and silver, which industry officials say will boost retail demand and help reduce smuggling activities in the world's second-largest gold consuming country.

The increased demand for gold in India may boost global gold prices. After the announcement, the local gold price in India fell by about 6%, reaching its lowest level in over three months.

Jim Wyckoff, Senior Market Analyst at Kitco Metals, said, "The overall technical outlook for gold remains bullish. This will continue to attract chart based speculators to go long, including some low buying during market downturns

After US President Biden withdrew from the presidential election, the uncertainty of the US political situation has increased, providing some support for gold prices.

On this trading day, it is necessary to pay attention to the initial values of the July SPGI manufacturing PMI for multiple countries in the United States and Europe; Additionally, keep an eye out for news related to the Bank of Canada's interest rate decision, the US election, and the geopolitical situation.

Harris made his campaign debut and fiercely criticized Trump, leading narrowly in the latest polls

US Vice President Harris criticized Republican candidate Trump at his first campaign rally since replacing Biden as the Democratic presidential candidate on Tuesday. Meanwhile, a Reuters/Ipsos poll shows that she leads Trump by a narrow margin.

In a 17 minute speech, Harris fiercely criticized Trump's weaknesses, comparing her former prosecutor background to Trump's record of serious offenders.

Harris listed a series of liberal priorities, stating that if elected, she would take action to expand abortion channels, make it easier for workers to join unions, and address gun violence, in stark contrast to Trump.

Trump wants our country to regress, "Harris said to thousands of cheering crowds at West Allis Central High School in the suburbs of Milwaukee, Wisconsin. Wisconsin is a crucial battleground for the November 5th election. She asked, "Do we want to live in a free, compassionate, and rule of law country, or in a country of chaos, fear, and hatred

The Reuters/Ipsos national poll conducted on Monday and Tuesday showed that Harris leads Trump's 42% with 44% approval rating among registered voters, following President Biden's announcement on Sunday to withdraw from the race and support Harris to succeed him as the Democratic candidate.

A poll conducted before Biden's withdrawal showed that a week ago, Harris and Trump's approval ratings were both 44%, tied; At the beginning of this month, Trump's approval rating was one percentage point ahead of Harris.

In these three polls, the differences were within a margin of error of three percentage points, but these results may indicate limited momentum for the Democratic Party - and also suggest that Trump may not have gained the usual upward momentum in support that usually accompanies the Republican National Convention held in Milwaukee last week.

Trump and his allies are trying to link Harris with some of Biden's unpopular policies, including the Biden administration's handling of the surge in immigration at the southern US Mexico border.

Trump said in a conference call with reporters on Tuesday that he is confident in defeating Harris. He pointed out that Harris had previously participated in the 2020 presidential election and was eliminated in the first round of statewide nominations. He said, "If she were running like she did during the election, then you know, I doubt she would be too powerful

Trump also stated that he will meet with Israeli Prime Minister Netanyahu in Florida on Friday, who will address the US Congress on Wednesday.

After 81 year old Biden gave up running for re-election under pressure within the party, Harris quickly consolidated support for her within the Democratic Party.

The Harris campaign team stated that she won the majority of delegates' promises on Monday night, essentially securing the nomination, which will be decided at next month's Democratic convention.

Most Democratic lawmakers support her candidacy, including the party's leaders in both the House and Senate, Schumer and Hakeem Jeffries, who endorsed Harris at a joint press conference on Tuesday.

Previous home sales in the United States fell more than expected in June, affected by record high housing prices

The decline in existing home sales in the United States in June exceeded expectations, as median home prices hit a new high, but increased supply and lower mortgage rates bring hope for a rebound in real estate activity in the coming months.

The data released by the National Association of Realtors (NAR) on Tuesday showed that existing home sales have declined for the fourth consecutive month, coupled with weak housing construction and building permit data, indicating that the real estate market shrank in the second quarter after driving economic growth in the first quarter.

Record high housing prices and high mortgage rates dragged down existing home sales in June, "said Nancy Vanden Houten, senior economist at Oxford Economics." Mortgage rates have recently fallen, and we expect them to further decline as the Federal Reserve begins to cut interest rates, which will support a moderate rebound in home sales later this year. "

The sales of completed homes in June decreased by 5.4% month on month, with a seasonally adjusted annual rate of 3.89 million units, the lowest level since December last year. Economists surveyed previously predicted that sales of existing homes would decline to 4 million units in June.

The median price of existing homes surged 4.1% compared to the same period last year, reaching a historic high of $426900. Although housing prices have hit historic highs for two consecutive months, the pace of price increases has slowed down due to supply approaching the highest level in four years. Existing home sales, which accounted for a large proportion of US housing sales in June, decreased by 5.4% year-on-year.

In June, housing inventory increased by 3.1% month on month, reaching 1.32 million units, the highest level since October 2020. Supply surged by 23.4% year-on-year.

However, entry-level housing is still in short supply and there is a shortage of new home construction. The government reported last week that the construction of new single family homes in June fell to an eight month low, and building permits also hit a one-year low.

Economists estimate that residential investment (including housing construction and sales) is likely to drag down the gross domestic product (GDP) in the second quarter, while in the first quarter, residential investment contributed over half a percentage point to GDP.

The government is scheduled to release the second quarter economic growth data this Thursday. It is expected that the year-on-year growth rate of GDP in the second quarter will be about 2%. The first quarter saw a growth of 1.4%.

According to the sales rate in June, it will take 4.1 months to digest the current inventory of second-hand houses. This is the longest time since May 2020, higher than 3.1 months a year ago. 4-7 months of supply is considered a healthy supply-demand balance.

We are seeing a slow shift from a seller's market to a buyer's market, "said Lawrence Yun, Chief Economist of NAR. The supply and demand dynamics are approaching a balanced market state.

US bond yields fell after weak housing market data and strong demand for two-year treasury bond bonds

The yield of US treasury bond bonds fell on Tuesday. The previously released housing market data was weak, and the auction demand for two-year treasury bond was strong. Investors waited for the inflation data later this week.

U. Tom Hainlin, senior investment strategist of S. Bank Wealth Management, said: "The primary pressure on treasury bond is the Federal Reserve, treasury bond supply, and then growth and inflation expectations."

"Our expectation is that the PCE in June will strengthen our view that we are decelerating. Maybe the increase we see is just a base effect or a temporary increase compared with a year ago. If you see a surprising increase (in PCE numbers), it may cause investors to reassess the P/E ratio of stocks or the yield of treasury bond bonds."

On Tuesday, the yield on the 10-year treasury bond bond fell 1.7 basis points to 4.243%. The 30-year treasury bond bond yield fell 0.4 basis points to 4.474%.

The Federal Reserve is scheduled to hold its next policy meeting at the end of July. According to CME FedWatch Tool, the market believes that the possibility of the Federal Reserve cutting interest rates by at least 25 basis points is extremely slim, and the market generally expects the Fed to cut interest rates at its September meeting.

Survey: The Federal Reserve will cut interest rates twice this year, with the first one in September

According to a Reuters survey, an increasing number of economists believe that the Federal Reserve will only cut interest rates twice this year, in September and December, as the resilience of US consumer demand requires the Fed to adopt a cautious attitude despite some easing in inflation.

The decline in price pressure over the past few months and recent signs of labor market weakness have given several members of the Federal Open Market Committee (FOMC), which formulates policies, "more confidence" that inflation will return to the Fed's 2% target without a significant economic slowdown.

The market seized this opportunity and digested the expectation of two or three interest rate cuts this year. The stock market rose by 2% this month, and the yield of 10-year US treasury bond bonds fell by more than 25 basis points. But economists have been insisting on the expectation of only cutting interest rates twice in the past four months, and now they are even more convinced of this.

The stronger than expected retail sales in the United States in June indicate that consumer spending remains resilient, coupled with surveys showing that the unemployment rate will not rise significantly from the current 4.1%, all of which suggest the need for patience.

A Reuters survey conducted from July 17 to 23 showed that all 100 economists stated that the Federal Reserve would keep interest rates unchanged on July 31, with over 80% of economists (82 out of 100) predicting that the Fed would cut interest rates by 25 basis points for the first time in September, pushing the federal funds rate to the range of 5.00% -5.25%. This proportion is higher than last month, when nearly two-thirds of respondents expected the Federal Reserve to cut interest rates for the first time in September.

Fifteen respondents expect the Federal Reserve to cut interest rates for the first time in November or December, while only three expect the Fed to wait until next year.

Nearly three-quarters of the surveyed economists -73 out of 100- predict that interest rates will be cut twice this year, each by 25 basis points. In a June survey, about 60% of economists held this view. In the latest survey, 70 economists stated that the two interest rate cuts will take place in September and December.

16 economists predict that there will be one or no interest rate cut this year, and 11 economists predict that there will be more than two interest rate cuts. Among the 21 primary traders surveyed, nearly 60% or 12 expect the Federal Reserve to cut interest rates twice in 2024.

The outlook will largely depend on key data to be released this week, including Q2 Gross Domestic Product (GDP) and June Personal Consumption Expenditure (PCE) price index.

Another Reuters survey predicts that the US economy was expected to grow at an annualized rate of 2.0% in the previous quarter, faster than the 1.4% growth in the first quarter; The year-on-year growth rate of PCE is expected to slightly decrease from 2.6% in May to 2.5% in June, with the Federal Reserve's target of 2%.

According to the latest survey's median estimate, it is expected that inflation indicators such as Consumer Price Index (CPI), Core CPI, PCE, and Core PCE will not reach 2% until at least 2026.

Just over half of the economists -17 out of 30- stated that the inflation rate for the remainder of this year is more likely to be higher than their estimates rather than lower.

This year's inflation is difficult to predict, and what it actually shows is unpredictable. For example, the persistence of rental inflation far exceeds everyone's expectations, "said Chris Low, Chief Economist of FHN Financial." As long as there is moderate growth, the Federal Reserve can remain patient

According to the median estimate of this survey, the Federal Reserve will cut interest rates every quarter until 2025 and lower the federal funds rate to the range of 3.75% -4.00% by the end of 2025.

This year, the US economy is expected to grow by 2.3%, faster than the current estimate of 1.8% by Federal Reserve officials. According to the survey, the US economy is expected to grow by 1.7% and 2.0% in 2025 and 2026, respectively.

Daily chart of spot gold