At the beginning of the Asian market on Thursday (August 29th), spot gold fluctuated narrowly and is currently trading around $2507.14 per ounce. Gold prices fell 0.8% on Wednesday, closing at $2504.46 per ounce. Affected by the strengthening of the US dollar, investors are paying attention to key inflation data from the world's largest economy in search of clues about the size of the Federal Reserve's possible interest rate cut in September. Investors also need to pay attention to the changes in the number of initial jobless claims in the United States and the revision of the US Q2 GDP, which will be released this trading day.

The US dollar rose 0.5% on Wednesday, closing at 101.06, marking the largest daily increase since June, making gold more expensive for holders of other currencies.

We are seeing some pressure from the strengthening of the US dollar. Now, we are waiting for further information to push the market in one direction or another based on inflation data, "said David Meger, head of metal trading at High Ridge Futures." Therefore, what we are currently seeing is profit taking consolidation before the report is released

Investors are currently paying attention to the impact of chip giant Nvidia's quarterly financial report and the release of US personal consumption expenditure (PCE) data on Friday.

Nvidia's third quarter gross profit margin forecast on Wednesday was lower than market expectations, and revenue was largely in line with expectations, which failed to impress investors who bet billions of dollars on the future of generative artificial intelligence (AI), which once drove Nvidia's stock price soaring. After Wednesday's trading, Nvidia's stock price fell by 8% at one point.

According to the CME FedWatch tool, the market expects a 63.5% probability of a 25 basis point rate cut in September and a 36.5% probability of a 50 basis point rate cut in the United States.

According to data from the World Gold Council, gold ETFs saw a small net inflow of 8 metric tons (approximately $403 million) last week, led by North American funds.

In other aspects, data on Tuesday showed that China's net gold imports through Hong Kong increased by 17% in July, marking the first increase since March. China is a major consumer of gold, and the rising demand for gold may support global gold prices.

The turbulent geopolitical situation is still attracting bargain hunting support. On Wednesday, the lowest price of gold fell to $2493.59 per ounce, but it was repeatedly supported by bargain hunting and safe haven buying, helping the gold price close above the 2500 mark.

However, from a technical perspective, the upward momentum of gold prices has significantly weakened. KDJ has a high dead cross, MACD's red bar has shrunk, and there is also a dead cross trend. Investors need to beware of the possibility of gold prices peaking in the short term. Pay attention to the support near the 21 day moving average of 2469.35 below. If this support is lost, it will increase the bearish signal for the future.

Demand at the end of the month drives the US dollar to its largest daily increase since June, pay attention to economic data

The US dollar rose on Wednesday due to month end buying and technical factors, having previously hit its lowest level in over a year during recent declines. Traders are waiting for data that may determine the pace of the Federal Reserve's upcoming easing cycle.

This month, there have been several sharp movements in the foreign exchange market, with concerns about a potential recession in the United States and hawkish signals from the Bank of Japan plummeting the US dollar and causing other major currencies to soar.

Karl Schamotta, Chief Market Strategist at Corpay in Toronto, said on Wednesday during trading: "As a series of potential risk events approach, including Nvidia's financial report and next Friday's highly important non farm payroll report, traders are reducing their risk exposure and buying the US dollar against high beta currencies

The US dollar index rose 0.5% to 101.06, marking the largest daily percentage increase since mid June.

However, so far in August, the US dollar has fallen by 2.8%, and is expected to record its largest monthly decline since November 2023. On the previous trading day, due to the recent large-scale re digestion of the Federal Reserve's interest rate cut expectations, the US dollar hit a 13 month low of 100.51.

Given the decline this month, the rise of the US dollar today is reasonable. We have seen a significant depreciation of the US dollar, which has fallen by 5% so far in the second half of 2024, "said Boris Kovacevic, Global Macro Strategist at Convera. From the perspective of fund flow, I believe that Wednesday's dollar buying is the usual flow of funds at the end of the month, especially considering the decline of the US dollar this month

After Federal Reserve Chairman Powell expressed a dovish inclination last week, investors still expect the Fed to start cutting interest rates next month. The current debate is about whether there will be a massive 50 basis point rate cut or a standard 25 basis point rate cut.

According to calculations by the London Stock Exchange Group (LSEG), the market currently expects a 37% chance of a larger rate cut, which is the same as later on Tuesday. The market expects a rate cut of about 105 basis points before the end of the year.

Later this week, the preliminary estimate of the US second quarter gross domestic product (GDP) and the core personal consumption expenditure (PCE) price index, which is a favored inflation indicator by the Federal Reserve, will be released. If weaker than expected, both may push the US dollar down.

Matt Simpson, Senior Market Analyst at City Index, stated that given the market's expectation of a rate cut in September that has been ongoing for several weeks, the downward momentum of the US dollar may be weakening, and the US dollar index has built support around 100.18/30.

Corporay's Schamotta said, "More broadly speaking, valuations of various asset classes appear overvalued. If investors hesitate in the coming weeks, the global dominance of the US dollar... may once again emerge

Atlanta Fed President Bostic: The 'time for action' to cut interest rates has arrived, but we must ensure that everything goes smoothly

Atlanta Federal Reserve Bank President Raphael Bostic said on Wednesday that as inflation rates accelerate and unemployment rates rise beyond his expectations, it may be time to "take action" to cut interest rates, but he hopes to confirm this before pulling the trigger.

The upcoming meeting of the Federal Reserve on September 17-18 will be the last of the third quarter of this year. Bostic said he hopes the monthly employment report and two inflation reports can confirm that the economy is on the track he believes.

I don't want that situation where we have to raise interest rates again after lowering them - that would be a very bad outcome, "he said at an event.

Nvidia's third quarter revenue forecast is basically in line with market expectations, with a drop of 8% at one point after the market closed

Nvidia's third quarter gross profit margin forecast on Wednesday was lower than market expectations, and revenue was largely in line with expectations, which failed to impress investors who bet billions of dollars on the future of generative artificial intelligence (AI), which once drove Nvidia's stock price soaring.

The stock price of this Santa Clara, California based company fell 8% in after hours trading, reducing some of its earlier declines. Nvidia's stock price closed down 2% during regular trading hours, but has risen over 150% so far this year.

Nvidia expects an adjusted gross profit margin of 75% for the third quarter, with a fluctuation of 50 basis points. According to data from the London Stock Exchange Group (LSEG), analysts on average predict a gross profit margin of 75.5% for the third quarter. The company's gross profit margin for the second quarter was 75.7%, with an average expectation of 75.8%.

Investors have high expectations for this chip manufacturer, and in the past two years, Nvidia's stock price has surged more than sevenfold, becoming one of the biggest beneficiaries of the rise in AI related stocks.

The company's ability to exceed expectations is facing increasing challenges, as each time it exceeded expectations, it pushed Wall Street to raise expectations even higher.

Nvidia expects third quarter revenue to be $32.5 billion, with a fluctuation of 2%. According to data from the London Stock Exchange Group (LSEG), analysts' average expectation is $31.77 billion.

The second quarter revenue was $30.04 billion, exceeding the expected $28.7 billion.

In the second quarter ending on July 28th, Nvidia's data center division saw a 154% increase in sales to $26.3 billion, exceeding expectations of $25.15 billion. Compared to the first quarter, it increased by 16%.

Kevin Garrigan, an analyst at WestPark Capital, said, "Judging from the stock market's reaction, for investors with high expectations, just $2 billion higher than expected is not enough

Nvidia has stated that it expects its latest Blackwell chip to generate billions of dollars in revenue in the fourth quarter, easing widespread concerns about reported production delays hindering growth.

The CEO of the company, Huang Renxun, said in a statement, "We are shipping Blackwell samples to our partners and customers

The decline in Nvidia's stock price has dragged down the S&P 500 index futures, which are currently down 0.7% and hit a new low of over a week at 5561 points during trading. This year, the correlation between stock market trends and gold prices has increased. When the stock market falls sharply, it will increase the demand for holding coins in the market, and gold often encounters selling, thereby dragging down the performance of gold prices.

Deputy Director of the CIA: Russia attempts to retake Ukrainian controlled areas, but will face 'tough battles'

David Cohen, Deputy Director of the Central Intelligence Agency (CIA), stated on Wednesday that Russian President Putin will launch a counterattack in an attempt to regain the territory of the Kursk region occupied by Ukrainian troops, but the Russian military will face a "tough battle".

Cohen said at a national security industry conference that Ukraine has occupied approximately 300 square miles (777 square kilometers) of land in Kursk, and its significance remains to be seen.

Cohen stated that although Kiev has expressed no intention of annexing the occupied areas, the Ukrainian military is building a defensive line and seems to intend to "retain some territory for a period of time".

Cohen said, "We can be certain that Putin will launch a counterattack in an attempt to regain that territory. I think our expectation is that this will be a difficult battle for the Russians

He pointed out that Putin "not only has to face the fact that there is a front line on Russian territory that he must deal with now, but also has to deal with the repercussions of losing a piece of Russian territory in domestic society

He also stated that Ukraine's success in Kursk "has the potential to slightly change" the conflict's "future situation," but did not elaborate.

Ukrainian President Zelensky stated on Tuesday that the war with Russia will ultimately end through dialogue, but Kiev must take the initiative and present a plan to US President Biden and his two potential successors.

The Kremlin refuted Zelensky's plan to end the war on Wednesday and stated that Russia will continue to carry out so-called "special military operations" in Ukraine.

Putin previously stated that any agreement must be based on Ukraine accepting the 'reality'. This will mean that Russia owns most of the territories in the four regions of Ukraine and Crimea.

Daily chart of spot gold