Understanding the Market | Gold stocks rise collectively as ADP employment data strengthens expectations for a U.S. rate cut; the market focuses on tonight's non-farm payroll data
Gold stocks rose collectively, with LINGBAO GOLD up 6.32% and CHINAGOLDINTL up 3.71%. ADP data showed that the U.S. added 54,000 jobs in August, lower than expected, reinforcing expectations for a Federal Reserve rate cut, with the market anticipating a 97.4% chance of a rate cut in September. Goldman Sachs predicts that if the Federal Reserve's credibility is damaged, gold prices could rise to nearly $5,000, recommending long-term investment in gold. CITIC Securities believes that the gold market is influenced by various factors, and gold prices are expected to exceed $3,730 per ounce by the end of the year
According to Zhitong Finance APP, gold stocks collectively rose. As of the time of writing, Lingbao Gold (03330) rose by 6.32% to HKD 16.33; China Gold International (02099) rose by 3.71% to HKD 120.2; Zhaojin Mining Industry (01818) rose by 3.7% to HKD 28.04; Zijin Mining (02899) rose by 3.07% to HKD 27.5.
In terms of news, on the evening of September 4th, ADP data showed that the U.S. ADP employment increased by 54,000 in August, lower than market expectations. Additionally, according to the latest data from the U.S. Department of Labor, the number of initial jobless claims for the week ending August 30th was 237,000, higher than market expectations. The continued cooling of the U.S. labor market further strengthened expectations for a Federal Reserve interest rate cut, with current market pricing indicating a 97.4% probability of a rate cut in September. Following the release of the ADP data, the market is focused on the U.S. non-farm payroll data for August, which will be released on Friday. Furthermore, Goldman Sachs predicts that if the credibility of the Federal Reserve is damaged, gold prices could rise to nearly $5,000 per ounce; Goldman Sachs recommends long-term investment in gold as it is a means of preserving value and is not affected by institutional trust.
CITIC Securities research report states that since the end of April, gold has been in a volatile market. The firm believes that factors such as tariff shocks, U.S. fiscal policy, geopolitical issues, and central bank gold purchases have created a complex balance of bullish and bearish forces. However, changes in these factors are expected to open up an upward trend for gold. The expectation for tariffs may have reached a temporary pause, while the impact of stagflation may just be beginning to manifest; the likelihood of a significant decrease in geopolitical risks within the year is low; the Federal Reserve may begin to cut rates earlier than expected; and the trend of global central bank gold purchases remains stable. Under a neutral assumption, the firm's model predicts that gold prices could exceed $3,730 per ounce by the end of the year
