Economic Impact - The "money bag war" initiated by the Trump administration has severely impacted the U.S. economy, imposing tariffs of up to 60% on Chinese goods and 25% on European steel and aluminum, leading to soaring prices and an additional monthly expenditure of $200 for food for average families [3][6] - A report from the California government indicated that tariffs resulted in a loss of up to $170 billion for businesses in the state over a year [3] Social Unrest - The policies of the Trump administration have led to widespread public discontent, with the Social Security Administration's website crashing for two weeks, preventing many elderly individuals from receiving their pensions [8] - Protests have erupted across the country, including truck drivers blocking highways due to financial losses from tariffs and elderly individuals gathering at Social Security offices to voice their grievances [8] Political Stalemate - The U.S. Congress has experienced paralysis, with 50 Democratic senators collectively taking a month-long recess to obstruct Trump's appointments, while the Republican party pushed through the appointment of Trump's ally, exacerbating political tensions [9] - Biden has publicly criticized Trump for undermining the Constitution and has highlighted the job losses resulting from Trump's Social Security policies [11] Federal Reserve Dynamics - Trump attempted to exert control over the Federal Reserve, pressuring it to lower interest rates, but faced opposition from seven board members during a rate meeting [6] - The resignation of a key board member, appointed by Biden, has allowed Trump to nominate a supporter of aggressive rate cuts, potentially leading to significant economic consequences, including a projected inflation rate increase to 5.2% [6]

Core Viewpoint - The Chinese economy is showing resilience and strong growth, supporting the appreciation of the RMB against the USD, while external factors such as a weakening USD and positive developments in US-China trade negotiations also contribute to this trend [1][3][4]. Economic Performance - In the first half of the year, China's economy demonstrated "steady progress and new achievements in high-quality development," with a robust GDP growth rate in the second quarter [1][6]. - The GDP growth rate for the second quarter exceeded expectations, reflecting the strong vitality and resilience of the Chinese economy [4][6]. Currency Exchange Dynamics - The RMB/USD exchange rate has strengthened, with the midpoint rate rising from 7.1586 at the end of June to 7.1494 at the end of July, indicating a bullish trend [3][4]. - On August 4, the RMB midpoint rate was reported at 7.1395, marking the largest increase since January 21 of the same year [3]. Policy and Market Signals - The People's Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) are implementing measures to support the RMB, including easing foreign investment quotas and encouraging the use of RMB in cross-border trade [4][7]. - The Central Political Bureau's meeting at the end of July released multiple positive policy signals aimed at improving economic fundamentals and market expectations [1][6]. Future Outlook - Analysts predict that the RMB will likely continue to appreciate, with expectations of reaching 7.1 by year-end, driven by a combination of domestic and international factors [7][8]. - The RMB is expected to exhibit "two-way fluctuations" while remaining generally stable, with potential for temporary breakthroughs under favorable conditions [7][8].

Group 1: Tariff War and Economic Implications - President Trump announced plans to significantly increase tariffs on Indian goods due to India's purchase of Russian oil and weapons, which he claims is for profit [1][3] - Trump threatened additional punitive tariffs on India, stating that if India continues its current purchasing behavior, a 25% import tariff would be imposed [3] - India's government responded by emphasizing that its oil imports from Russia are part of long-term contracts and are necessary for stabilizing energy costs for consumers [4] Group 2: Employment Data and Market Reactions - Trump accused the U.S. Labor Department of manipulating employment data to favor Democrats, leading to his decision to dismiss the head of the Bureau of Labor Statistics [5] - The recent non-farm payroll report showed only a 73,000 increase in jobs, significantly below the expected 110,000, and the unemployment rate rose to 4.2% [8][9] - The disappointing employment data has raised concerns about the U.S. economy, leading to a spike in market volatility and increased expectations for Federal Reserve interest rate cuts [9][10] Group 3: Precious Metals Market Trends - Following the employment report, gold and silver prices increased, with COMEX gold futures rising by 0.85% to $3428.6 per ounce [8] - The market anticipates a high probability of interest rate cuts by the Federal Reserve, with a 94.4% chance of a 25 basis point cut in September [8] - Analysts predict that if the U.S. economy continues to weaken, it could lead to a favorable environment for precious metals, with gold prices potentially breaking above $3500 per ounce in the second half of the year [10][11]

Fundamental Analysis - The U.S. labor market is showing signs of a rapid slowdown, with July non-farm payrolls increasing by only 73,000, the lowest in nine months, significantly below the expected 104,000 [1] - Revisions to previous months' data show a downward adjustment, with May's non-farm payrolls revised down by 125,000 to 19,000 and June's by 133,000 to 14,000, resulting in a total reduction of 258,000 jobs for May and June combined [1] - The unemployment rate in July rose to 4.2%, matching expectations and up from 4.1% in the previous month [1] - The U.S. Trade Representative indicated that current tariff policies will remain unchanged, with significant tariffs on imports from Canada (35%), Brazil (50%), India (25%), and Switzerland (39%) [1] Technical Analysis - Gold prices have risen from approximately 3267.0 to a peak of 3367.0, marking a $100 increase, with the market showing upward momentum [4] - The moving averages indicate support for gold prices, suggesting a potential buying opportunity around the support level of 3333.0, with resistance levels at 3376.0 and 3392.0 [4] - Silver prices have declined from 39.52 to a low of 36.20, reflecting a bearish trend, with moving averages confirming the downward movement [7] - A selling strategy is recommended for silver, with a focus on the resistance level of 37.18 and potential targets at 36.66 and 36.35 [7]

Group 1 - Citi has adjusted its bearish forecast on gold, predicting that prices will rise to record highs in the short term due to deteriorating U.S. economic conditions and tariffs driving inflation [1] - Analysts, including Max Layton, forecast that gold prices will fluctuate between $3,300 and $3,600 per ounce over the next three months, influenced by higher-than-expected average U.S. import tariffs [1] - This new outlook contrasts sharply with Citi's June prediction, which anticipated gold prices would fall below $3,000 per ounce in the coming quarters [1] Group 2 - Despite a more optimistic outlook for gold prices, Citi analysts noted that their previous short-term price range of $3,150 to $3,500 per ounce performed well, as recent price consolidation confirmed this assessment [2] - The analysts maintain a cautious stance on gold prices for 2026, citing increased certainty regarding trade and potential stimulus measures from the "Great and Beautiful Act," which may signal an end to the pause in U.S. job growth [2]

Economic Outlook - The recent employment report indicates that the U.S. economy is heading towards a recession, with various economic indicators signaling a downturn [1] - Consumer spending is stagnating, construction and manufacturing sectors are contracting, and employment is expected to decline [1][2] - The Federal Reserve faces challenges in responding to rising inflation, which complicates potential interventions [1] Employment Data - Non-farm payrolls increased by only 73,000 last month, significantly below the expected 110,000, with previous months' data also revised downwards [2] - The average monthly job growth over the past three months is only 35,000, indicating a slowdown in employment growth [2] - Despite a stable unemployment rate around 4% to 4.2%, the labor force participation rate is declining due to reduced foreign-born labor [3] Labor Market Dynamics - The reduction in foreign-born labor by 1.2 million over the past six months is attributed to restrictive immigration policies, leading to a stagnation in labor supply [3] - There is a hiring freeze across the economy, particularly affecting new graduates, which suggests a significant drop in the "neutral job growth" needed to maintain stable unemployment [3] - Morgan Stanley economists have raised alarms about potential recession, noting that private sector job growth has averaged only 52,000 per month over the past three months [3][4] Economic Indicators - The second quarter GDP showed unexpected growth, but domestic final demand indicators suggest a slowdown [2] - Core inflation accelerated to 2.8%, exceeding the Federal Reserve's target of 2%, while consumer spending growth in June fell short of expectations [2] - The Atlanta Fed's GDP tracking model predicts a slowdown in economic growth from 3% in the second quarter to 2.1% in the third quarter [2]

Core Viewpoint - The U.S. non-farm payroll data for July showed only 73,000 jobs added, significantly below the expected 104,000, officially labeling the economy as "recession" [1] - The data for May and June was substantially revised down, raising suspicions about previous data embellishment [1] Group 1 - July non-farm payrolls were 73,000, falling short of the 104,000 forecast [1] - The downward revision of May and June data has led to skepticism regarding the accuracy of prior employment reports [1]

Group 1: Gold Market Overview - The gold market experienced a strong rebound, with spot gold prices surpassing $3360 per ounce, marking a daily increase of 2.22% [1] - Weak U.S. economic data released on August 1 led to a significant decline in the dollar and risk assets, raising market expectations for interest rate cuts [1] - Concerns about a U.S. economic recession have resurfaced, with the probability of a rate cut in September rising from 48% to 80%, and nearly 100% for October [1] Group 2: U.S. Economic Indicators - July non-farm payroll data showed an increase of only 73,000 jobs, falling short of the expected 104,000, with prior months' data significantly revised down [1] - The unemployment rate rose to 4.2%, higher than the previous month's 4.1% [1] - The ISM manufacturing index for July dropped to 48, indicating the fastest contraction in nine months, while the University of Michigan consumer confidence index also fell below expectations [1] Group 3: Gold Mining Companies Performance - Several gold mining companies reported strong performance in the first half of the year, with profit growth exceeding market expectations [3] - Five companies are expected to see profit growth between 40% and 65%, while three companies may experience growth between 84% and 191% [3] - The increase in profits is attributed to rising gold prices and increased production, leading to a positive cycle of growth for gold stocks [3] Group 4: Valuation and Investment Potential - As of June 30, major gold mining companies had an average price-to-earnings (PE) ratio of only 12.5 times, compared to a historical average of about 20 times [3] - This indicates that gold stocks still possess high value and significant potential for valuation recovery, warranting close attention from investors [3]

Market Overview - International gold prices saw a significant increase on August 1, closing at $3,348.53 per ounce after reaching a high of $3,355.09 [1] Economic Data - The U.S. unemployment rate for July was reported at 4.2%, matching market expectations, while the previous month's rate was 4.1% [2] - The seasonally adjusted non-farm payrolls for July added 73,000 jobs, falling short of the expected 110,000, with prior months' figures revised down significantly from 147,000 to 14,000 [2] - Average hourly wages increased by 3.9% year-over-year, surpassing the expected 3.8%, and month-over-month wages rose by 0.3%, aligning with expectations [2] Economic Outlook - Moody's chief economist Mark Zandi warned that the U.S. economy is on the brink of recession, citing stagnation in consumer spending and contraction in construction and manufacturing sectors [4] - The low unemployment rate is attributed to stagnant labor growth and a decrease in immigrant labor, leading to a decline in labor force participation [4] - The current job market is experiencing a freeze in hiring and a reduction in average working hours, indicating increasing employment pressures [4] Federal Reserve Insights - Stephen Miran from the White House suggested the need for a "new perspective" on economic statistics, following President Trump's claims of manipulated employment data [5] - Federal Reserve officials, including Williams, noted that the labor market remains robust despite the disappointing non-farm payroll data, with a cautious stance on potential interest rate cuts [6][7] - The probability of the Fed maintaining interest rates in September is at 10.9%, while the likelihood of a 25 basis point cut is at 89.1% [8] Gold Market Dynamics - The largest gold ETF, SPDR Gold Trust, reported a decrease in holdings by 1.43 tons, bringing the total to 953.08 tons [7] - Gold prices reacted positively to the weak employment data, with a notable rise following the release of the non-farm payroll report [11]

Core Insights - Morgan Stanley reports a significant downward revision of 258,000 jobs, the largest since 1979, which is 4-5 times the normal adjustment range [1][2][5] - The analysis indicates that current employment data holds more predictive power regarding economic trends than historical revisions, maintaining the expectation of no interest rate cuts until 2025 [1][9] Employment Data Revision - The July employment report revealed unexpected large downward revisions for the previous two months: June's non-farm employment was revised from 147,000 to only 14,000, a reduction of 133,000; May's data was adjusted from 144,000 to 19,000, a drop of 125,000, totaling a net revision of 258,000 [2][3] - Historically, from March 1979 to July 2025, the average net revision has been an upward adjustment of 1,200 jobs, making this downward revision the largest in 46 years when excluding the impact of the COVID-19 pandemic [3] Statistical Analysis - The average absolute value of historical revisions is 56,000 jobs, with a standard deviation of 61,000; thus, the 258,000 job revision is statistically significant and considered an outlier [5] - Using a Probit regression model, Morgan Stanley found that while the large downward revision correlates with an increased recession probability, the effect is limited, raising the likelihood of recession by only 9 percentage points [9] Current Employment Signals - The July report showed an addition of 73,000 jobs, which is deemed more critical than the previous downward revisions; the current employment data is viewed as a stronger indicator of economic health [9] - Other indicators from the July report, such as moderate wage growth, slight increases in hours worked, and low unemployment rates, suggest that these current signals are more relevant than the historical downward adjustments [9] - Despite acknowledging that the downward revisions indicate a faster-than-expected slowdown in labor demand, Morgan Stanley maintains its forecast of no interest rate cuts through 2025, suggesting that recession risks remain elevated but not at a level that would alter the overall economic outlook [9]