On August 12th, after a 0.5% decline last week, the international gold price was trading near 2,430 USD per ounce in the Asian market, with the overall trend still fluctuating in the high price area of the year.

The market is quietly waiting for the release of the US CPI data for July on Wednesday.

Investors believe that with inflation continuing to perform well, the Federal Reserve will cut interest rates as scheduled in September. Wall Street expects the core US CPI for July to decrease by 0.1% year-on-year, opening the door for a rate cut. Conversely, if the inflation increase exceeds expectations, the market may also reassess the possibility of a 50 basis point rate cut in September.

Chicago DRW Trading market strategist Lou Brien said that the main theme of the bond market at the beginning of the month is the concern about the labor market conditions and the future path of the Federal Reserve, and due to the yen carry trade, the market has added a lot of noise.

Last week, the yield on two-year Treasury bonds, which is sensitive to interest rates, rose by 1.1 basis points on Friday to 4.055%, a total increase of 18 basis points last week, the largest single-week increase since March; the yield on 10-year Treasury bonds fell by 5.3 basis points on Friday to 3.944%, a total increase of 15 basis points last week, the largest single-week increase since April.

From September 17th to 18th, the Federal Reserve will hold its September interest rate meeting and release the SEP economic condition statement. Currently, the trading market is pricing the probability of a 50 basis point rate cut by the Federal Reserve at 48.5%, and a 25 basis point rate cut at 51.5%. Last week, during the global stock market disaster, traders even briefly fully digested the expectation of a 50 basis point rate cut by the Federal Reserve, and swap market traders speculated that the Federal Reserve might even cut rates urgently before September.

CreditSights senior investment-grade strategist Zachary Griffiths said, "If there is any situation with the US CPI data, I am worried that it will be an unexpected overall figure, but our basic expectation is that inflation is falling. The economy is slowing down because consumer momentum is running out, excess savings are running out, and we are beginning to see an increase in the unemployment rate, which should affect spending and inflation data."

Brien believes that "concerns about the labor market conditions and the pace of the Federal Reserve's actions still exist and will become more clearly highlighted in the coming weeks. Many parts of the labor market have been weakening for a considerable period of time and will continue to weaken."

Last Thursday, the US Department of Labor released the number of initial jobless claims for the week ending August 3rd. The data showed that the seasonally adjusted number of initial claims for that week was 233,000, a decrease of 17,000, the largest drop in about 11 months. The number of initial jobless claims for the previous week was 240,000.

Affected by the weakening expectation of recession, the US stock market stopped falling and rebounded last Thursday, with the Dow Jones Industrial Average once surging by more than 700 points, and the S&P 500 recording the largest single-day increase since November 2022. After opening 176 points higher, the Dow Jones quickly rose, once reaching 39,508 points; the S&P 500 rebounded by up to 2.5%, and the technology stock-dominated Nasdaq once surged by 3.1%. The VIX volatility index, known as the "fear index," fell by more than 14%, below 24.

Last week, market panic selling made gold a victim, with a crazy surge of more than 90 USD on Monday, touching 2,364 USD per ounce, and a significant rebound of more than 40 USD to above 2,420 USD per ounce on Thursday last week, reducing the weekly decline to around 10 USD, and finally closing down by 0.42%.