Gold gives back all gains since August 10, with non-farm payroll data becoming a short-term key factor

Source: Shanghai Securities News · China Securities Journal

According to Shanghai Securities News China Securities Journal reporter Zhang Jiao, the United States has launched a new round of strikes against Iran, causing energy prices to surge and reigniting inflation expectations. The probability of a Federal Reserve rate hike in September has risen above 60%, while the gold market suffered a sharp setback.

On September 2, London spot gold plunged during trading and briefly fell below the $4,300/ounce mark. As of 13:03 (UTC+8), it was down 0.51% on the day, trading at $4,306.372/ounce. London gold has been declining continuously since August 26, erasing all gains made since August 10. On the same day, COMEX gold futures fell more than 1% intraday.

On the information front, the U.S. Central Command announced on social media on the 1st that it has completed its latest round of strikes against Iranian military targets. The attack targeted the Islamic Revolutionary Guard Corps, including anti-aircraft positions, radar systems, maritime assets and facilities, mine-laying capabilities, as well as communication sites.

Due to the dual drag from rising real interest rates and a strengthening dollar, precious metals have undergone a broad correction. Dayou Futures believes that global bond markets continue their sell-off, with government bond yields in major economies steadily climbing and inflation concerns rising significantly. Federal Reserve Chair Walsh released a hawkish signal last Friday at the Jackson Hole central bank annual meeting, quickly raising market expectations for further tightening of monetary policy this year. In addition, the European Central Bank and the Bank of Japan are also facing rate hike pressure, resulting in concentrated global monetary policy tightening. At the same time, the sovereign debt scale of major economies continues to expand, term premiums are being repriced, and long-end interest rates are moving higher.

The upcoming U.S. non-farm payrolls report for August, to be released this Friday, will serve as the most crucial short-term observation window. Dayou Futures stated in its research report that if the data is strong, it will reinforce rate hike expectations and put more pressure on precious metals; weak data may ease panic and provide some respite for gold price.

Shenwan Hongyuan Futures commented that after the U.S. Treasury announced an expansion of long-term bond repurchases, the market began to reprice dollar credit risk, lending support to precious metals. From a medium to long-term perspective, the price center of precious metals has a sustained upside foundation: U.S. debt pressure continues to expand, global central bank gold buying trends persist, and global geopolitical risk is elevated, while the restructuring of political and economic order is still underway.

“Currently, the logic of rising interest rates temporarily outweighs the logic of safe haven, and gold price rebounds are hindered, but the mid-term value of gold as a credit hedge tool remains intact,” Dayou Futures said.

Zhongjin Wealth Futures pointed out that regarding gold’s trend, given the escalation of U.S.-Iran conflict and oil price rebound, patience is still needed to wait for the end of these factors' suppression of gold price movements.

Dayou Futures suggests that in the short term, precious metals are suppressed by rising real interest rates, so before the release of non-farm payrolls data on Friday, it is advisable to remain on the sidelines rather than trade blindly. Once the data is released and the direction becomes clear, participate accordingly.

Editor: Zhu Henan