At the beginning of the Asian market on Friday (August 30th), spot gold fluctuated slightly lower and is currently trading around $2518.84 per ounce. Gold prices rose about 1% on Thursday, closing at $2521.02 per ounce. Due to rising concerns about the geopolitical situation, gold prices briefly rose to around $2528, approaching historical highs. However, the US Q2 GDP was revised upwards, and the number of initial jobless claims suggests a stable labor market. The US economy still has resilience, suppressing expectations of a 50 basis point interest rate cut by the Federal Reserve in September. The continued rebound of the US dollar index has made gold bulls hesitant. Investors are paying attention to US inflation data - US July PCE data - to further understand the potential magnitude of interest rate cuts.

In terms of geopolitical situation, with the ceasefire agreement still uncertain, Israel has recently continued to launch attacks and military operations in the Gaza Strip and the West Bank of the Jordan River. According to media reports on the 29th, the Israeli military dispatched tanks deep into the southern town of Khan Younis in the Gaza Strip on the 28th local time, and launched airstrikes on the area while fighting against local militants, resulting in the deaths of multiple Palestinian civilians. In addition, the Israeli military's attack on the West Bank on the 28th also resulted in the deaths of multiple Palestinians.

The Israeli military claimed to have killed five Palestinian militants who were hiding in a mosque in the West Bank city of Tulkarem.

In addition, Deputy Director of the Central Intelligence Agency, Cohen, stated on the 28th that Russia is expected to launch a counterattack to regain the territory of Kursk Oblast occupied by Ukrainian forces.

In terms of data, the US Department of Commerce stated that the gross domestic product (GDP) grew at an annual rate of 3.0% in the second quarter, higher than the 2.8% reported last month. Consumer spending, which accounts for more than two-thirds of the economy, increased by 2.9%, higher than the previously reported 2.3%. Another report shows that the number of initial jobless claims in the United States fell to 231000 last week, slightly lower than the 232000 expected by economists surveyed by Reuters, indicating a sustained cooling of the labor market.

After the data was released, the gold price fell to around $2503.5 at one point, but was soon supported by bargain hunting and safe haven buying, and quickly turned from a decline to an increase, reaching a high of $2528.59 per ounce.

Everett Millman, Chief Market Analyst at Gainesville Coins, said, "The market seems to be preparing for a rate cut no matter what, the only question now is the magnitude - how much the Federal Reserve can cut interest rates

My current expectation is that the gold market may experience a sideways trend at least until the next Federal Reserve meeting, but due to geopolitical reasons, there does seem to be strong bottom support

However, after the data was released, the market's expectation of a 50 basis point interest rate cut by the Federal Reserve in September slightly decreased. The US dollar index continued to rise, reaching a new high of 101.58 since August 22, closing at 101.38, an increase of about 0.3%. This made gold bulls hesitant, and the price of gold fell to around $2521 in the late trading session.

Gennadiy Goldberg, head of US interest rate strategy at TD Securities, said, "The market has slightly lowered its expectations for a rate cut in 2024 due to a better than expected GDP correction, mainly driven by stronger consumer sentiment. Consumer strength is the real focus of the market, not inflation. Looking ahead, the market will pay more attention to employment and consumer conditions to evaluate possible rate cuts

The yield of the US 10-year treasury bond bond rose 2 basis points to 3.862% on Thursday, the fourth consecutive trading day, and the largest one-day increase in a week. The two-year treasury bond bond yield climbed 2.9 basis points to 3.896%.

According to CME FedWatchTool, traders believe that the probability of a 25 basis point rate cut in September is 65.5%, and the probability of a 50 basis point rate cut is approximately 34.5%.

Investors are currently focusing on Friday's Personal Consumption Expenditures (PCE) price index, which is the inflation indicator favored by the Federal Reserve. Of course, attention still needs to be paid to the relevant news on the geopolitical situation. Relatively speaking, the US dollar index has stabilized and rebounded significantly in the short term, while gold prices have repeatedly surged 2530, which has been hindered. If the US dollar index continues its rebound trend, it may trigger a pullback in gold prices, and investors need to be vigilant.

Analysts said that Thursday's data also increased expectations that the United States may completely avoid a recession or only experience a slight recession.

Brad Bechtel, Global Head of Foreign Exchange at Fu Rui, said, "Due to end of month cash flows... there has been some improvement in US dollar buying. We may see this situation continue. The yuan index has been oversold since falling below 101. I expect it to return to the 103-104 range. However, labor market reports are crucial for this

As the end of the month approaches, investors tend to close their positions, so when an asset (such as the US dollar) is sold this month, they usually buy back the asset to balance their accounts or investment portfolio.

So far in August, the US dollar has fallen by 2.7%, and is expected to record its largest monthly decline since November 2023.

UBS's Serebriakov said, "We have a feeling that the sell-off of the US dollar has been excessive... Given that the Federal Reserve is approaching a rate cut, the reasons are understandable

The US economy remains resilient, with low layoff rates and steady GDP growth in the second quarter

The number of initial jobless claims in the United States decreased last week, but the number of reemployment opportunities for unemployed workers is decreasing, indicating that the unemployment rate in August is likely to remain high.

Although the labor market is slowing down, the orderly slowdown keeps economic expansion on track. Other data on Thursday showed that the economic growth rate in the second quarter exceeded initial expectations, driven by consumer spending. Corporate profits also rebounded in the previous quarter, which helps to further alleviate concerns about economic recession.

Although the slowdown in the labor market has laid the foundation for the Federal Reserve to start cutting interest rates next month, the data does not support a 50 basis point rate cut.

Christopher Rupkey, Chief Economist of FWDBONDS, said, "The concept of an economic soft landing has not changed yet." Corporate profits also rebounded in the second quarter, which means that companies are unlikely to take any cost cutting measures to tighten their belts and adjust their employee numbers. "

As of the week ending August 24th, the number of first-time applicants for state unemployment benefits decreased by 2000, adjusted for seasonal factors, to 231000. Economists previously predicted that the number of applicants in the past week would be 232000. With the distortion caused by the temporary shutdown of car factories to adjust equipment for producing new car models and the gradual weakening of the impact of Hurricane Berrier, the number of people applying for unemployment benefits has fallen from the 11 month high reached in late July.

The data revision released by the US Bureau of Statistics last week showed that the average monthly job growth for the 12 months ending in March was 68000 lower than the initial estimate. But most economists believe that this so-called indicator correction estimate is misleading.

The estimated values of the indicators are based on data from the "Quarterly Census of Employment and Wages", which comes from reports submitted by employers to state unemployment insurance plans. This data does not include undocumented immigrants, and economists believe that undocumented immigrants were one of the reasons for the strong job growth last year.

Morgan Stanley economists wrote in a report, "The downward revision of the Bureau of Statistics' revised data may be too large, as the revision is based on administrative data from unemployment insurance records, which may not capture many job positions filled by undocumented workers

The reason for the loss of momentum in the labor market is due to the tightening of monetary policy leading to a decrease in recruitment, rather than layoffs. This has caught the attention of Federal Reserve officials, including Federal Reserve Chairman Powell, who stated last week that "the time has come to adjust policy.

The financial market expects that the Federal Reserve will begin its easing cycle next month, lowering the benchmark overnight interest rate by 25 basis points. A 50 basis point reduction is also under consideration. For over a year, the Federal Reserve has maintained its policy rate target range at the current 5.25% -5.50%, following a cumulative increase of 525 basis points in 2022 and 2023.

As of the week of August 17th, after seasonal adjustment, the number of people applying for unemployment benefits increased by 13000, reaching 1.868 million. The number of renewals is approaching the level of the end of 2021, indicating that it takes longer for unemployed individuals to find new jobs.

The data on unemployment benefits will be collected during the government's August unemployment rate survey period. The number of people applying for unemployment benefits has slightly increased between the July and August survey periods.

Economists predict that the unemployment rate in August will either remain near a three-year high of 4.3% or drop to 4.2%. The unemployment rate has been rising for four consecutive months, partly reflecting the surge in labor supply caused by immigration.

The second estimate of gross domestic product (GDP) for the second quarter released by the Bureau of Economic Analysis of the US Department of Commerce on Thursday showed that the year-on-year GDP growth rate for the previous quarter was revised up to 3.0%, compared to 2.8%. The economic growth rate for the first quarter was 1.4%.

The growth rate of consumer spending, which accounts for more than two-thirds of the total economy, has been revised upwards to 2.9%, up from the previous value of 2.3%, partly driven by wages. This offset the downgrading of corporate investments (mainly software). Export and private inventory investment have also been downgraded.

PNC Financial Chief Economist Gus Faucher said, "Economic growth will slow down in the near future, but there will be no recession

Deputy Director of the Central Intelligence Agency: It is expected that Russia will launch a counterattack to regain the territory of Kursk Oblast occupied by the Ukrainian army

On the 28th, Deputy Director of the Central Intelligence Agency, Cohen, stated that Russia is expected to launch a counterattack to regain the territory of Kursk Oblast occupied by the Ukrainian army.

According to media reports on the 28th, Cohen stated at an intelligence and national security summit held in Maryland that the Ukrainian military has occupied over 770 square kilometers of land in the Russian border state of Kursk, and its significance remains to be observed. Although Kiev has stated that it has no intention of annexing the occupied territories, the Ukrainian military is building defensive lines and seems to intend to retain some of them for a period of time. He believes that Russian President Putin will launch a counterattack to try to regain the occupied territories, but for the Russian military, this is expected to be a difficult battle.

Media analysis suggests that reclaiming occupied territories may force Russia to make some difficult decisions, such as where to deploy its troops, thereby posing challenges to frontline manpower. A US military official stated that Moscow may need at least three weeks to assemble a sufficient number of troops.

On the 29th, Orenta.com quoted analysts as saying that the CIA's statement proves the connection between the US and Ukrainian military operations in Kursk Oblast. The United States is using this to provide more intelligence and other support to Ukraine

Israeli tanks suddenly enter Khan Younis

Despite the uncertain future of the ceasefire agreement, Israel has been launching attacks and military operations in the Gaza Strip and the West Bank in recent days. According to Reuters on the 29th, the Israeli military dispatched tanks deep into the southern town of Khan Younis in the Gaza Strip on the 28th local time, and launched airstrikes on the area while fighting against local militants, resulting in the deaths of multiple Palestinian civilians. In addition, the Israeli military's attack on the West Bank on the 28th also resulted in the deaths of multiple Palestinians.

On the 29th, the media quoted local residents as saying that on the 28th local time, Israeli army tanks suddenly entered the center of Khan Younis and ordered the evacuation of people in the eastern part of the city, forcing many families to flee and some people to be trapped in their homes. The local health department and medical personnel stated that the Israeli army launched airstrikes on the area during the battle against armed militants led by the Palestinian Islamic Resistance Movement (Hamas) in Khan Younis, resulting in at least 11 deaths.

According to reports, an Israeli airstrike in the central Gaza Strip town of Deir Barah, where over one million people have taken refuge, resulted in the death of eight Palestinians near a school that houses displaced individuals. In addition, a local journalist and his sister were killed in an airstrike at their home in the central Gaza Strip city of Nusselat.

Multiple foreign media reports have stated that the Israeli military has ordered local residents to evacuate areas where Hamas and other armed militants have launched attacks. Hamas and some armed factions in Palestine have stated that they have clashed with the Israeli army in different areas of Gaza, launching anti tank rockets and mortar shells.

On the 29th, the Israeli Defense Forces announced that they had attacked 40 targets in Gaza in the past day and "eliminated" dozens of armed personnel through airstrikes and close range combat. According to the latest news, Hamas spokesperson Jihad Taha stated on the 29th that Hamas has agreed to a 7-day ceasefire in the Gaza Strip to carry out polio vaccination. According to Egyptian sources, it is expected that the ceasefire will begin within a few days and last for 3 to 5 days, but the ceasefire does not include the area where the Israel Defense Forces operate in the Gaza Strip.

The Israeli army is still launching military operations in the West Bank of the Jordan River. On the 29th, the media reported that the Israeli Defense Forces confirmed that they had conducted large-scale counter-terrorism operations with the Israeli Security Agency in the northern West Bank areas of Jennin and Tulkarem. A spokesperson for the Israeli Defense Forces revealed at a briefing that Israel has discovered Iran's "systematic strategy" to smuggle weapons and explosives into the West Bank.

Daily chart of spot gold