At the beginning of the Asian market on Thursday (August 22), spot gold fluctuated narrowly and is currently trading around $2512.96 per ounce. Gold prices bottomed out and rebounded on Wednesday, briefly falling below the 2500 mark during trading, but then quickly rebounded to close at $2512.26 per ounce. The US Department of Labor revised its employment data, and the minutes of the last Federal Reserve meeting showed that policymakers strongly preferred to cut interest rates at the September policy meeting. The continued decline in US dollar and Treasury yields continued to provide support for gold prices. In addition, the deadlock in Gaza ceasefire negotiations has provided safe haven support for gold prices.

Independent metal trader Tai Wong said, "According to the minutes of the Federal Reserve meeting, the majority of committee decision-makers are preparing to cut interest rates in September, and spot gold prices are close to record highs. I am cautiously optimistic because all the positive news for the market has already been released. Gold prices may rise, but it is unlikely to accelerate aggressively without the push of unexpected events

The meeting minutes released on Wednesday showed that at the July meeting, the "vast majority" of decision-makers "believed that if the data continued to broadly meet expectations, it may be appropriate to relax policies at the next meeting.

After the release of the Federal Reserve meeting minutes, the decline of the US dollar widened, hitting a seven month low of 100.91 and closing at 101.18, providing some support for gold prices.

Federal Reserve Chairman Powell will deliver a highly anticipated speech at the Kansas City Fed Jackson Hole Economic Symposium on Friday, with people paying attention to his new insights on the labor market.

This may attract more attention to Powell's speech at Jackson Hole, "said Vassili Serebriakov, a foreign exchange strategist at UBS. This implies that the labor market is not as strong as the Federal Reserve believed and expressed at the time. But what this means for the future outlook is still unclear

The market is seeking more clues about the potential magnitude of the Fed's interest rate cut at its September 17-18 meeting, as well as whether it may lower borrowing costs at each subsequent meeting.

Serebriakov said, "This is very consistent with the situation where the Federal Reserve will start cutting interest rates. But it is still difficult to say what this means for the pace of policy easing and other details

According to the CME FedWatch Tool, traders currently believe that the probability of a 50 basis point rate cut next month is 36%, up from 33% earlier on Wednesday, while the probability of a 25 basis point rate cut is 64%.

Adam Button, Chief Monetary Analyst at ForexLive, said, "It has become easier for the Federal Reserve to cut interest rates now and before the end of the year, but I don't think (employment data) provides a strong reason for a 50 basis point rate cut

He said, "We know that this is a year of steady economic growth, with good corporate profits and a strong momentum of economic growth in the year ending in March

The yield of treasury bond bonds fell on Wednesday, which also provided support for gold prices. The downward revision of the employment data and the minutes of the Federal Reserve's meeting in July strengthened people's expectations that the Federal Reserve will eventually cut interest rates in September, which will be the first time the Federal Reserve has cut interest rates in more than four years. The yield of US 10-year treasury bond bonds also hit a new low of 3.761% in more than two weeks,

The US Bureau of Labor Statistics has revised job data for the period from April 2023 to March 2024, showing a 0.5% decrease in employment, equivalent to 818000 jobs, which is the high-end of the market expectation range for a reduction of up to 1 million jobs.

If these numbers remain stable in the final correction in February, it will be the largest downward adjustment since the 902000 job losses in March 2009.

Joe Kalish, Chief Global Macro Strategist at Ned Davis Research, said, "It seems that the impact of tight monetary policy is greater than the Federal Reserve initially imagined. Tight monetary policy has indeed slowed down the economy and the pace of job creation, which should allow the Fed to start taking action even if the economy is not in recession. They should start cutting interest rates in September

My overall feeling is that the Federal Reserve may want to cut interest rates by 50 basis points in September instead of 25 basis points, because this is the first time a rate cut has been made, and you want to continue the rate cut process, then cut interest rates by 25 basis points in November and December, "said Tom di Galoma, Managing Director and Head of Fixed Income at Curvature Securities

The 20-year and 30-year yields in the United States also fell to their lowest points in two weeks, closing at 4.166% and 4.065%, respectively.

On this trading day, changes in the number of initial jobless claims in the United States and initial manufacturing PMI values for August in European and American countries will also be released, and investors need to pay attention.

From a technical perspective, at the daily level, after being blocked from rising on Tuesday, the gold price recorded a cross star on Wednesday, indicating a weakened momentum last week. It is necessary to be cautious of the short-term pullback risk of the gold price and pay attention to the support near the 2500 level and the 10 day moving average of 2482.26.

The number of new jobs added in the United States is far less than the initial data, highlighting the Federal Reserve's concerns about the labor market

The US Department of Labor stated on Wednesday that in the year ending March, US employers added far fewer jobs than initially reported, highlighting the Federal Reserve's growing concerns about the health of the labor market as it prepares to begin cutting interest rates in September.

The Ministry of Labor has reduced the total number of employment positions by 818000 from April 2023 to March 2024. The downward adjustment this time is about 0.5%, which means an average monthly increase of about 174000 job positions during this period, compared to the previously reported figure of 242000.

The significant decrease in this number is the first of two annual revisions of the 'indicators' conducted by the department, as the department can only collect more accurate data in the months following the release of the monthly employment report.

If the data remains unchanged in the final correction in February, it will be the largest downward revision since the 902000 job losses in March 2009.

This also coincides with the view of some economists that data collection issues mean that previously reported strong employment growth has been systematically overestimated.

The growth of employment opportunities in private enterprises has been reduced by 819000, which is 0.6% lower than the previous estimate of the sector. The growth of employment opportunities in government departments remains basically unchanged.

The employment opportunities in the professional and business services industry decreased the most, by 358000 compared to previous estimates, a decrease of 1.6%; Next is the leisure and hotel industry, which decreased by 150000 units, a decrease of 0.9%. The manufacturing industry has reduced 115000 jobs and also decreased by 0.9%.

The few departments that have made upward revisions include: the private education and healthcare service sector, which increased by 87000, or 0.3%; The transportation and warehousing department increased by 56400 units, with a growth rate of 0.9%; The public utility sector increased by 1700, with a growth rate of 0.3%.

The revised data shows that after seasonal adjustment, the number of employed people in the government and private employers in March was about 157.3 million, lower than the previously reported about 158.1 million.

Until the final revised indicators are announced in February 2025, the data from the Ministry of Labor will continue to reflect the initial revised values. The final correction value is usually not significantly different from the initial correction value.

Ryan Sweet, Chief US Economist at Oxford Economics, said, "This is significantly larger than the normal correction... The Federal Reserve believes that recent employment growth has also been exaggerated, which strengthens its decision to shift its focus from inflation to the labor market

In the second revision of last year's indicators released in February this year, the department lowered the total number of employment positions by 40000 as of March 2023.

Minutes of Federal Reserve Meeting: The vast majority of Federal Reserve decision-makers strongly favor a rate cut in September

The Federal Reserve seems to be on track to cut interest rates in September, as the minutes of its July 30-31 meeting showed that the "vast majority" of decision-makers said they may take this action in September.

The meeting minutes released on Wednesday even showed that some decision-makers were willing to lower borrowing costs at the July meeting.

The Federal Open Market Committee (FOMC) kept the benchmark interest rate range unchanged at 5.25% -5.50% on July 31, but opened the door for a rate cut at its September 17-18 meeting.

For some time now, financial markets have been anticipating that the September meeting will kick off the lowering of the federal funds rate, with the current target range for the benchmark rate being 5.25% -5.50%. It is expected that by the end of this year, the cumulative interest rate cut will reach a full 100 basis points.

The meeting minutes show that at the July meeting, most decision-makers believed that 'if the data continues to broadly meet expectations, then relaxing policies at the next meeting may be appropriate'.

The meeting minutes also pointed out that "many" Federal Reserve decision makers believe that the interest rate stance is restrictive, and "several attending decision makers" believe that keeping interest rates unchanged will mean that monetary policy will increase its drag on economic activity as inflationary pressures continue to cool.

The meeting minutes show that although all Federal Reserve decision-makers agreed to keep interest rates unchanged in July, "several" decision-makers stated that progress in reducing inflation in the face of rising unemployment "provides a reasonable reason for a 25 basis point rate cut in July," or "if given the option, they may support such a decision.

The record also shows a decrease in the number of decision-makers who are concerned that premature relaxation of monetary policy may drive inflation back up.

Jamie Cox, Managing Partner of Harris Financial Group, stated that "the minutes of the Federal Reserve meeting have dispelled all doubts about the September rate cut." He added that "the Fed's communication strategy is to make its meeting a less impactful event for the market, and they are strictly following the script“

The Federal Reserve stated that data will determine the path of interest rates, and observers are already considering the magnitude of future rate cuts and whether aggressive action is needed at the beginning of the easing cycle.

The reason for supporting interest rate cuts is that price pressures are easing and falling towards the 2% target, and concerns about the job market have intensified following recent data showing an increase in unemployment.

The unemployment rate hit a low of 3.4% at the beginning of last year, and has climbed to 4.3% as of last month. The rapid increase in unemployment rate has increased the urgency of interest rate cut discussions and prompted some analysts to consider reducing borrowing costs by 50 basis points next month.

The minutes of the meeting pointed out that policymakers believed that the job market had basically recovered to the situation before the COVID-19 epidemic began, and said that the job market was "strong but not overheated".

The meeting minutes also pointed out that "most" decision-makers believe that the risks in the job market have increased, while the risks of inflation tasks have decreased.

At present, the unemployment rate in the United States is higher than the 4% predicted by Federal Reserve policymakers in their latest economic forecast in June, and also higher than the 4.2% predicted by policymakers to be reached by the end of next year.

When Powell speaks at the Kansas City Fed's annual seminar in Jackson Hole, Wyoming on Friday, the market may learn about his latest views. Other Federal Reserve decision-makers may also express their views on the outlook during the meeting.

Another important event regarding the outlook for monetary policy is the August employment report from the US Department of Labor, which will be released in early September.

Israeli military confirms airstrike on southern Lebanese city causing death of Fatah official

On the afternoon of the 21st local time, the Israel Defense Forces confirmed that they had launched an airstrike near the southern Lebanese city of Sidon earlier that day, resulting in the death of Khalil Makdah, an official of the Palestinian National Liberation Movement (Fatah).

Khalil is the brother of senior Fatah official Munir al Makda. Israel accuses Munir al Makda of collaborating with Hezbollah in Lebanon and the Islamic Revolutionary Guard Corps in Iran over the years to promote attacks against Israel.

Gaza ceasefire talks deadlocked

According to a report by a reporter from The Times of Israel, two Arab officials from the mediating country and a third official involved in the negotiations revealed that the Gaza ceasefire plan proposed by the United States last week went too far in meeting Netanyahu's demands for Israeli troops to be stationed in the Rafa and Nezarim corridors.

Therefore, the negotiations have reached a deadlock, and an Arab official lamented that another high-level negotiation meeting in Cairo later this week will be meaningless unless the United States pressures Netanyahu to abandon the new demands and modify the mediation plan accordingly.

Another Arab official was puzzled by US Secretary of State Antony Blinken's repeated public insistence on the US mediation plan approved by Netanyahu in recent days, believing that this wrongly portrays Hamas as the only obstructionist. We have returned to the starting point, negotiations are deadlocked, and the US strategy is only to publicly accuse Hamas, but this has been proven ineffective in the past, "said the official involved in the negotiations.

Daily chart of spot gold