Good morning, let's take a look at the latest news first.
741 people have been arrested! The King of England speaks out for the first time about large-scale violent riots
According to CCTV News, on August 9th local time, the National Police Council of the United Kingdom announced that 741 people have been arrested since protests against the government's immigration policies occurred in many parts of the UK and caused large-scale riots in some areas, of which 302 have been charged with participating in violent riots.
According to Reuters, a spokesperson for Buckingham Palace stated on the 9th that after the racist riots targeting Muslims and immigrants in the UK, King Charles III called for mutual respect and understanding. This is the first time the king has spoken out since the riots began last week.
According to reports, the spokesperson said in a statement that the king thanks the police and emergency departments for their response to the riots, and welcomes the way community organizations are fighting against "minority attacks and criminal behavior".
According to reports, after the king had a phone call with Prime Minister Kil Stamer and police officials, the spokesperson said, "His Majesty still hopes that the common values of mutual respect and understanding can continue to strengthen and unite this country
It is reported that a knife attack occurred on July 29th in the town of Southport, Merseyside, England. A 17-year-old male suspect broke into a primary school dance classroom and committed the crime, resulting in the death of three children and multiple injuries. After the incident, protests took place in London, Liverpool, Bristol, Hull, Manchester and other places, which turned into violent riots.
New news from the Middle East
According to CCTV News, on August 10th local time, Shamhani, the political advisor to Iran's Supreme Leader, stated that Israel's sole purpose in killing Haniya was to seek war and undermine the Gaza ceasefire agreement. He stated that Iran is prepared to severely punish Israel through legal, diplomatic, and media procedures.
CCTV News quoted the Wall Street Journal as saying that the United States has warned Iran that if Iran launches a large-scale attack on Israel, it will face serious consequences.
Israeli media reported on August 9th local time, citing sources, that a new round of ceasefire negotiations in the Gaza Strip is expected to be held in Doha, Qatar, and the head of Israel's intelligence and intelligence agency (Mossad), Davide Barnea, is expected to lead a delegation to attend.
On the early morning of the 10th, the Israeli army launched an attack on a school in Gaza City, resulting in over 100 deaths. On the 10th local time, the Palestinian Islamic Resistance Movement (Hamas) issued a statement strongly condemning the Israeli army's attack on a school in Gaza City that morning. In addition, on August 9th local time, the US military stationed in Syria was attacked by drones.
The United States has decided to lift the ban on selling offensive weapons to Saudi Arabia
According to Reuters, the US State Department announced on the 9th that the Biden administration has decided to lift the ban on selling offensive weapons to Saudi Arabia, indicating a change in the US policy of pressuring Saudi Arabia to end the Yemen war over the past three years.
A senior official from the US State Department confirmed that the department will lift the ban on transferring air to ground weapons to Saudi Arabia. The official said, "We will consider new transfers based on specific cases that comply with conventional arms transfer policies
According to reports, a congressional aide said that the government informed Congress this week of the decision to lift the ban. A source said that sales will resume as early as next week.
It is reported that the Biden administration took a tough stance on arms sales to Saudi Arabia in 2021, citing the significant civilian casualties caused by Saudi actions against Houthi militants allied with Iran in Yemen. But since the Israeli Palestinian conflict last year, Washington has worked more closely with Riyadh to jointly develop plans for the post-war Gaza Strip.
Gold first suppressed and then rose, market participants: the future market is still full of variables
Affected by multiple factors such as global economic conditions, Federal Reserve monetary policy adjustments, and geopolitical risks, the precious metal market has shown a fluctuating trend of first suppressing and then rising this week.
The Futures Daily reporter learned that the global economic situation has always been an important indicator of the precious metal market. Recently, signs of a slowdown in global economic growth have become increasingly apparent, especially against the backdrop of persistently weak manufacturing data and rising unemployment rates in the United States, leading to a significant increase in market risk aversion. Investors are turning to safe haven assets such as precious metals to cope with potential economic uncertainty. The increase in demand for safe haven has directly driven the prices of precious metals to historic highs.
However, due to the significant fluctuations in the Asia Pacific market at the beginning of the week, the logic of tight trading liquidity led to a decline in precious metal prices.
In July, the non farm payroll employment in the United States was far weaker than expected, and the unemployment rate rebounded to 4.3%, raising the risk of a hard landing in the US economy and triggering large-scale risk aversion. However, the Asia Pacific stock market fell sharply, and the Japanese stock market triggered a circuit breaker. In addition to the expectation of the Federal Reserve's interest rate cut, the Bank of Japan's interest rate hike triggered deleveraging liquidation in the yen carry trade, leading to a sell-off in the entire market. Precious metals also suffered from selling for cash, reducing leverage. "Cheng Xiaoyong, Deputy General Manager of Guangzhou Financial Futures Research Institute, said that from historical experience, when the market experiences severe turbulence, extreme panic, or even financial crises, the risk aversion of gold is often not fully realized from the beginning, and it first goes through a stage of selling for liquidity.
According to Gong Ming, Deputy Director of Jinrui Futures Research Institute, the trend of precious metals has shown significant differentiation this week, with gold fluctuating at a high level and silver continuing to be weak, falling sharply. At the beginning of the week, the sharp drop in the Nikkei index triggered a circuit breaker, and recession concerns significantly increased. Market concerns caused local liquidity tension, and gold prices also fell. Silver, on the other hand, has been greatly affected by recession concerns, with its industrial attributes dragging down significantly and its price falling sharply.
In addition, the Federal Reserve's monetary policy also has a crucial impact on the prices of precious metals. It is reported that this week, the expected increase in interest rate cuts by the Federal Reserve has become one of the key factors driving up the prices of precious metals. With the release of key economic data such as the US manufacturing PMI and initial jobless claims, the market generally expects the Federal Reserve to adopt a more loose monetary policy in the coming period to stimulate economic growth. The increasing expectation of interest rate cuts has led to downward pressure on the US dollar exchange rate, further enhancing the attractiveness of precious metals priced in US dollars.
From the perspective of the expectation of interest rate cuts by the Federal Reserve, it is positive for the future of gold prices because while nominal interest rates are expected to decline, real interest rates are likely to also decline. As an opportunity cost for holding gold, a decline in real interest rates is conducive to stimulating the return of investment demand in the private sector. As of August 9th, the world's largest gold ETF - SPDR - held 846.91 tons of gold, which had risen to 848.04 tons on August 6th, setting a record high since February 6th. In addition, the Federal Reserve's interest rate cuts are likely to correspond to a weak US dollar, and the decline in the US dollar index is also conducive to the rise of international gold prices denominated in US dollars, "said Cheng Xiaoyong.
According to Cheng Xiaoyong's introduction, from the perspective of market performance, concerns about the US economic recession have eased, panic has cooled down, and the VIX index has fallen from 38.57 on August 5th to 20.37, but still above the watershed of 20. The market's expectations for the Federal Reserve's interest rate cuts may continue, and the rebound of the US stock market means that the market's valuation repair logic is under the downward trend of trading rates. However, in the future, we should be wary of the negative impact of the economic downturn on performance.
However, some institutions believe that the current expectation of the Federal Reserve cutting interest rates has been fully priced by the market. Gong Ming believes that although interest rate cuts have not yet occurred, US bond yields have already fallen. This year's excess savings have been exhausted, and there is some uncertainty in fiscal strength during the election year. Therefore, the Federal Reserve continues to manage the expectation of interest rate cuts to keep the real yield of US bonds at a weak level to support liquidity. If the expectation of interest rate cuts falls through and other liquidity supports are weak, precious metals may find it difficult to further rise.
The current round of interest rate cuts has been favorable for the gold market, and it is highly likely that it has already passed most of the time. Looking ahead to the future, considering the limited probability of a recession crisis, the space for the gold price center to further rise significantly is limited, "said Gong Ming.
In addition, the US presidential election also to some extent determines the trend of the US economy, which in turn affects the prices of precious metals. In Cheng Xiaoyong's view, there is still a great deal of uncertainty in the current US presidential election, with Trump's chances of being elected fiercely competing with Democratic candidate Harris. Trump's recent remarks have also had a significant impact on alternative assets.
According to past practice, Trump has implemented the 'America First' strategy and unilaterally closed cooperation channels with other countries. The United States is' reversing 'the process of global economic and trade integration, and the trend of trade protectionism is reigniting. This may trigger severe market turbulence, and the demand for safe haven gold will always exist. Harris hastily took over the Democratic Party's campaign, and his unclear policy direction is likely to continue many of Biden's domestic and foreign policy measures, with unclear impact on the financial market, "said Cheng Xiaoyong.
In Gong Ming's opinion, as far as Trump's previous ruling policies are concerned, the economic side advocates tax cuts to boost the economy and reduce the risk of economic recession. In addition, considering that Trump himself does not support the Russia-Ukraine conflict, the relevant conflicts may ease after Trump takes office, therefore, Trump's victory is bad for gold.