WIKIFX REPORT: [Market Morning] Gold Fell Below the 1710 Mark, US Bond Yields Rose Again

GOLD

Gold yesterday settled down by -0.3% at 50281 as the dollar index gained further ground above the 110 mark, reaching levels not seen since June 2002, as investors brace for more interest rate hikes from the Federal Reserve. Traders' focus shifts to the European Central Bank's rate action when it meets on Thursday. The market also expects a big interest rate hike from the U.S. Federal Reserve in its Sept. 20-21 policy meeting.

Comment: Gold prices slipped on Thursday after comments from Federal Reserve Chairman Jerome Powell cemented expectations for a 75 basis point rate hike at the upcoming policy meeting. The Fed is “firmly committed to fighting inflation and wants to do this without the ”very high social costs involved in fighting inflation previously.

Suggestion: short Spot gold at 1709.90 position, and the target point is 1699.40.

FOREX

Affected by the sharp interest rate hike by the European Central Bank in September and the hawkish speech of European Central Bank President Lagarde, the U.S. dollar index failed to test the resistance of 110 and then gave up most of the gains in the day and finally closed up 0.073% at 109.67; 10-year U.S. Treasury bonds The yield returned to 3.3%, and the yield on the two-year U.S. Treasury bond once again reached a high of 3.5%.

Comment: The dollar rose against the yen on Thursday, climbing for the ninth day in the past ten sessions, after Federal Reserve Chairman Jerome Powell reiterated that the central bank would continue to raise interest rates to curb soaring inflation and warned against premature easing of monetary policy. USD/JPY has been the most sensitive pair to U.S. rate expectations over the past few months.

Suggestion: short EUR/USD at 1.00050 position, target point is 0.99490.

OIL

In terms of crude oil, WTI crude oil fluctuated upwards. After the release of EIA crude oil inventory data that exceeded expectations, the increase narrowed and finally closed up 1.32% at US$82.72 per barrel; Brent crude oil finally closed up 0.84% at 88.42 USD/barrel.

Comment: Crude oil prices rose more than 1% on Thursday as some technical traders bought the dip, and Russia threatened to stop exporting oil and gas to some buyers. Oil prices fell to a seven-month low in the previous session.

Suggestion: short the U.S. crude oil at 82.540 position, the target point is 80.870.

STOCKS

US stocks closed, the S&P 500 closed up 0.66%, the Nasdaq closed up 0.6%, and the Dow closed up 0.61%. Lithium batteries, social media, banking, and other sectors were among the top gainers, while popular Chinese concept stocks generally fell. Bilibili closed down more than 15% after its performance.

Comment: Wall Street's major indexes rose on Thursday, boosted by financial institutions and health care companies, as investors digested hawkish comments from policymakers that cemented bets that the Federal Reserve will raise interest rates sharply later this month. The major indexes were tugging back and forth in choppy trade as concerns remained about how the Fed would go next to rein in soaring inflation.

Suggestion: go short the Nasdaq index at 12344.200 position, target point is 12115.900.