Today is the first day of the Dragon Boat Festival holiday, and last night the peripheral market was not calm, with gold and silver continuing to plummet.
As of the time of publication, the London spot gold price has plummeted by 3.45%, with a drop of $81.89 per ounce (equivalent to a drop of RMB 20.93 per gram); Silver plummeted 6.8%, falling $2.13 per ounce.
On Friday, the three major US stock indexes collectively closed lower, with May non farm payroll data exceeding expectations, suppressing market bets on the Federal Reserve's interest rate cut.
As of the close, the Dow Jones index fell 0.22% to 38798.99 points; The S&P 500 index fell 0.11% to 5346.99 points; The Nasdaq index fell 0.23% to 17133.13 points.
It is worth noting that Game Station closed down 39.38% on Friday, at $28.22 per share, marking the largest decline in three years. The company's Q1 revenue was 882 million US dollars, lower than the same period last year's 1.237 billion US dollars and lower than the estimated 995.5 million US dollars.
And on Friday noon local time, Keith Gill, the leader of retail investors at the gaming station, who was also known as "Roaring Cat" on Twitter and Google's YouTube platform, launched a live video on YouTube. The background image of the entire live broadcast is the real-time trading chart of the game station stock price. Due to multiple drops and circuit breakers in trading, Jill kept asking the audience, "Is my computer stuck?" Within the first 5 minutes of the live broadcast, over 600000 viewers watched online.
He mentioned that Game Station is the only position in his investment portfolio, and "my aggressive investment style is almost certainly not suitable for netizens." The screenshots he shared include 5 million shares of Game Station common stock and 120000 shares of call options. A few days ago, he posted a screenshot showing that he owns $140 million worth of game station stocks and $120 million worth of options, with a total income of $85.5 million. But after experiencing a sharp drop last night, these returns may have significantly shrunk.
Has the Federal Reserve's interest rate cut changed?
On the evening of June 7th Beijing time, the non farm payroll data released by the United States for May far exceeded expectations, dispelling investor concerns about a slowdown in the job market and lowering market expectations for the Federal Reserve's interest rate cut.
Data shows that the number of non farm payroll workers in the United States increased by 272000 in May, which is higher than the 165000 in April and far higher than the market expectation of 190000. In terms of wages, the average hourly wage is also higher than expected, with a month on month increase of 0.4% and a year-on-year increase of 4.1%, with expected growth rates of 0.3% and 3.9%, respectively.
Non farm payroll in the United States (initial value, in thousands, data source: Wind)
However, there are also hidden concerns in the US economic data: the unemployment rate rose to 4% in May, marking the first time since January 2022 that it has exceeded this level.
The strong employment and wage growth have led investors to reduce their bets on the Federal Reserve's interest rate cut this year.
After the data was released, Citigroup believes that policymakers may not take action until September, and JPMorgan Chase even expects interest rates to remain unchanged until November.
Investors hope that the US job market will continue to cool down, thereby prompting the Federal Reserve to start a rate cutting cycle as soon as possible. However, some people also believe that if employment remains strong, Americans will continue to consume, which is an important reason why corporate profits can achieve growth.
After the release of the non-agricultural data report, the US dollar index rose sharply. The US stock market rose above 104.95 in the morning and approached 104.95 in the afternoon, reaching a new high since May 30th, with a daily increase of 0.79%.
After 18 consecutive months of growth, the People's Bank of China suspended its gold holdings
Official data shows that China's gold reserves were at 72.8 million ounces at the end of May, unchanged from the end of April. This means that the central bank did not increase its holdings of gold in May, as it had previously increased its holdings of gold reserves for 18 consecutive months.
The reporter noticed that at the end of October 2022, the corresponding amount was 62.64 million ounces, with a difference of 10.16 million ounces, indicating a significant increase in official holdings of gold reserves in the past two years. However, the increase has gradually slowed down recently and was temporarily suspended in May.
The World Gold Council has revealed that China's official increase in gold reserves in April was 2 tons, the smallest increase since the resumption of the announcement in November 2022. At the end of April, China's official gold reserves were 2264 tons, accounting for 4.9% of the total foreign exchange reserves, the highest level in history. So far in 2024, the central bank has announced a total of 29 tons of gold purchases. In the past 18 months, the official gold reserves have cumulatively increased by 316 tons, an increase of 16%.
According to data released by central banks of various countries, global official gold reserves increased by 39 tons in January this year, more than twice the revised net purchase of 17 tons in December last year, and it is also the eighth consecutive month for central banks worldwide to achieve net purchase.
The Global Gold Demand Trends Report for the full and fourth quarters of 2023 released by the World Gold Council has revealed that central bank gold demand for 2023 is the second highest on record, only slightly lower than the historical record set in 2022.
According to Securities Daily, from the long-term trend of gold prices, Wen Bin, Chief Economist of Minsheng Bank, believes that during this round of sharp rise, the relatively stable relationship between gold prices and other variables (such as the actual yield of 10-year US bonds and gold ETF holdings) has been broken. And factors such as the US debt crisis, geopolitical risks, and central bank purchases of gold have gradually become the main factors driving up gold prices. However, in the long run, there is no clear correlation between these factors and gold prices, and they are more of a topic for investment speculators to hype up in stages. In the situation where the gold market is still dominated by financial investment, it can be foreseen that after the end of the periodic volatility, the future trend of gold prices is likely to return to a series of long-term stable relationships.
He expects that overall, if gold prices rise above $2510 per ounce within the year, investors will need to be particularly cautious; If the gold price breaks through $2600 per ounce, the risk of a significant decline will significantly increase.