On July 22nd, influenced by Biden's withdrawal from the election, the US dollar index fell, and gold prices once surged to $2,411.84 per ounce. Last Friday, after setting a historical record, gold was affected by profit-taking selling pressure and plummeted by more than 2%, closing at $2,399.27 per ounce.

Yesterday, under continuous pressure within the Democratic Party, Biden had to announce the renunciation of re-election. In a letter posted on platform X, Biden stated that he had intended to seek re-election, but for the best interests of the Democratic Party and the United States, he decided to withdraw from the presidential race and focus on completing his presidential duties during his term. Biden said he would explain this decision in detail to the nation later this week.

After a disastrous performance in the first presidential debate, Biden has been under unprecedented pressure recently. After the Trump shooting incident, the support rate of the current US president has fallen to 30%. In a seemingly settled situation, many well-known figures in American politics and business have turned to Trump, Democratic members have changed sides, and even those who had not previously expressed their positions, such as Musk and Zuckerberg, have begun to show favor to the Republicans. Musk even stated that he would donate about $45 million per month to Trump's campaign fund to support the "new president's election."

After announcing the withdrawal, Biden said he would fully support and endorse US Vice President Harris to obtain the Democratic presidential candidate nomination.

However, Harris seems to have failed to gain the recognition of the bigwigs within the Democratic Party, and her disastrous performance on border issues and the Russia-Ukraine war has cost the current US vice president a lot of points. Analysis suggests that the Democratic Party may overturn the candidate favored by Biden at the primary meeting and re-elect the Democratic presidential candidate. In addition, the independent candidate, the much-anticipated middle force - Kennedy, may also participate in the election as a Democratic member.

No matter what, the "internal chaos" of the Democratic Party will greatly increase the probability of Trump's victory. Due to the series of radical reform measures he promised after the election (including large-scale infrastructure construction and increased tariffs), the US stock index futures have risen slightly. Asian stock index futures fluctuate, with Australian and Japanese stock index contracts falling, while Hong Kong's stock index futures remain stable.

After the news of Biden's withdrawal came out, with the US dollar index falling, gold prices quickly rose, reaching a high of $2,411.73 per ounce, an increase of more than $10 within the day. Analysis suggests that after Biden withdrew from the presidential election, the chaos of the US election has escalated, and gold prices have climbed. If Trump wins the election, he will promote the devaluation of the US dollar - the sharp drop in the US dollar will support gold.

Regarding the impact of Biden's withdrawal on the gold market, Bart Melek, head of commodity strategy at TD Securities, said in the latest research report that there are signs that the profit-taking selling pressure on gold may continue this week.

Melek said that although the downside risk of gold is increasing recently, it is not the time to be bearish on gold. He pointed out: "Technical aspects, US politics, monetary policy, and geopolitics all indicate that the market is unlikely to see further continuous significant selling. Melek believes that he expects the support level of gold to be at $2,389 per ounce. And last week, gold prices rose to a historical high, as investors increasingly focused on the expectation that Trump may win the November presidential election. At the same time, the market has almost completely digested the rate cut in September.

Melek analyzed that the above two factors will continue to support the long-term upward trend of gold. The slowdown of US economic activity will support the expectation that the Federal Reserve will start a new round of easing cycle after this summer. Once the market stabilizes, and we see signs of economic slowdown confirmed, it is sufficient to prove that the Federal Reserve's radical easing policy is reasonable, then gold prices are likely to test a new historical high again. With the increased interest of institutional investors in ETFs, gold, and futures returns, gold prices may rise thereafter.

Forex senior strategist James Stanley said that the only factor that could disrupt the upward trend of gold is the rise of inflation, which will lead investors to question the possible rate cut. Although this situation is not likely to happen, he said it still exists.

This week, the United States will still announce a series of important data, in turn, the S&P Global Purchasing Managers' Index (PMI), the US Bureau of Economic Analysis (BEA) will announce the preliminary value of the second quarter GDP growth, the US Bureau of Economic Analysis will announce the June Personal Consumption Expenditure (PCE) Price Index, etc.

As of the time of writing, according to the CME "Fed Watch": The probability of the Federal Reserve maintaining the interest rate unchanged in August is 95.3%, and the probability of cutting the interest rate by 25 basis points is 4.7%. The probability of the Federal Reserve maintaining the interest rate unchanged in September is 2.9%, the cumulative probability of cutting the interest rate by 25 basis points is 92.6%, and the cumulative probability of cutting the interest rate by 50 basis points is 4.5%.