Last night, gold exploded, setting a new historical high!

April 15, 2024

The latest report on non farm employment data released by the US Bureau of Labor Statistics on Friday showed that the number of non farm workers in the United States increased by 303000 in March, the largest increase since May last year, exceeding market expectations of 200000 people. The previous value increased by 275000 people and was revised to 270000 people.

The unemployment rate in March was 3.8%, which is in line with expectations and has declined from the previous value of 3.9%. But the labor force participation rate has risen to 62.7%, an increase of 0.2 percentage points from February. Among the key average salary indicators, the monthly salary increased by 0.3% year-on-year and 4.1% year-on-year, both in line with Wall Street's expectations.

From an industry perspective, employment growth mainly comes from healthcare, leisure and hotel industries, as well as the construction industry. Among them, the new employment in the healthcare sector led the increase, with 72000 people, followed by government departments (71000 people), the leisure and hotel industry (49000 people), and the construction industry (39000 people). In addition, retail trade contributed 18000 people, while the "other services" category increased by 16000 people.

In addition, the number of new non-agricultural employment increased from 229000 to 256000 in January, and decreased from 275000 to 270000 in February. After these revisions, the total number of new jobs added in January and February increased by 22000 compared to before the revision.

After the release of the non-farm report, the swap market significantly lowered the Federal Reserve's interest rate cut expectation for 2024, delaying the expected timing of the Fed's first interest rate cut from July this year to September this year. The Federal Reserve will have more time to shelve interest rate cuts.

The US dollar index continued to rise, with a surge of over 50 points, reaching a peak of 104.69. Subsequently, the increase narrowed and closed at 104.298 at the end of the foreign exchange market. The selling of US treasury bond bonds intensified, and the yield of US 10-year treasury bond rose 8.3 basis points to 4.399%; The yield of two-year treasury bond rose 9.2 basis points to 4.750%; The 30-year treasury bond bond yield rose 7.4 basis points to 4.553%.

In a statement released by the White House, US President Biden stated that the March non farm payroll report is a milestone in the US recovery.

Biden said, "Three years ago, I took over an economy on the brink of collapse. Today's report shows that 303000 new jobs were created in March, marking a milestone we have exceeded since taking office with 15 million new jobs. This means that an additional 15 million people have gained the dignity and respect that work brings."

White House Economic Committee Director Brad also stated that this is a very encouraging report indicating that the US economy can continue to expand.

Collective gains in US stocks

On April 5th local time, the three major US stock indexes collectively closed higher. As of the close, the Dow Jones Industrial Average rose 307.06 points from the previous trading day to 38904.04 points, an increase of 0.80%; The S&P 500 index rose 57.13 points to 5204.34, an increase of 1.11%; The Nasdaq rose 199.44 points to 16248.52 points, an increase of 1.24%.

On Wednesday of this week, major stock indexes all recorded declines, with the Dow falling 2.27%, the worst weekly performance since 2024; The S&P 500 index fell 0.95%; The Nasdaq fell by 0.8%.

Terry Sandven, Chief Equity Strategist at Bank of America Wealth Management, said, "After achieving substantial returns in the first quarter, there may be some consolidation in the stock market in the short term. In the upward trend of the market, a moderate pullback will be a normal fluctuation."

In terms of sectors, all eleven sectors of the S&P 500 index rose across the board. The communication services sector and the industrial sector led the way with gains of 1.61% and 1.43% respectively, while the essential consumer goods sector had the smallest increase of 0.22%.

Large tech stocks generally rose, with Facebook parent companies Meta and Netflix up over 3%, Amazon up nearly 3%, Nvidia up over 2%, Microsoft up nearly 2%, Google A and Broadcom up over 1%, and Apple up slightly; Tesla fell more than 3%, while Intel fell more than 2%.

Apples rose slightly by 0.45%. As part of the decision to terminate its automotive and smartwatch display projects, Apple will lay off 614 employees in Silicon Valley. A few weeks ago, the company had halted its autonomous electric vehicle project. According to the announcement submitted to California, 614 employees were notified of their layoffs on March 28th, effective May 27th.

Nvidia rose 2.45% as the company continues to expand into Southeast Asia. On Thursday local time, Indonesian officials revealed that Nvidia plans to collaborate with Indonesian telecommunications giant Indosat Ooredoo Hutchison to spend $200 million to establish an artificial intelligence center in Indonesia.

Meta rose 3.21%. On the news side, Meta Platforms will add more annotations to AI generated content rather than deleting it, and the new policy will be implemented in May.

Tesla closed down 3.63%, with a drop of over 6% during the day. Musk denies canceling his long-standing commitment to low-cost car plans. Previously, three so-called insiders told the media that Tesla had cancelled its long-standing commitment to low-cost cars.

Energy stocks generally rose, with Western Oil rising more than 2%, while Shell, ExxonMobil, and ConocoPhillips rose more than 1%.

Popular Chinese concept stocks have fluctuated, with iQiyi up over 4%, Tencent Music up nearly 4%, Futu Holdings up over 1%, NetEase, Ideal Automobile, Pinduoduo, and Ctrip slightly rising; Weibo and NIO fell more than 2%, Baidu and Bilibili fell more than 1.5%, while Alibaba, Xiaopeng Motors, and saw a slight decline.

Gold prices hit a new historical high

International gold prices have surged, with London gold and New York gold rising by over $40 on the day, both reaching historic highs. Among them, spot gold in London rose 1.77% to $2329.57 per ounce; COMEX gold rose 1.76% to $2349.1 per ounce.

Affected by this, gold stocks surged, with gold fields rising by over 4%, and Harmony Gold and Barrick Gold rising by over 2.5%.

On the news front, institutional traders stated that CME has raised gold futures margin by 6.8% and silver futures margin by 11.8%.

In addition, spot silver also rose, with an increase of over 2%; COMEX silver rose by over 1%, while SHEE silver rose by nearly 5%.

Johan Palmberg, Senior Quantitative Analyst at the World Gold Council, said that the over-the-counter and futures markets for gold have been active, with an estimated 40% increase in trading volume. "Compared to stocks and bonds, the activity in the gold options market is exceptionally active, which means people are currently particularly interested in gold," he said.

Many analysts also predict that once the Federal Reserve starts lowering benchmark interest rates, stimulating demand from investors who are still watching (such as physically supported gold ETFs), gold prices will hit new highs.

It is worth mentioning that billionaire investor and head of US hedge fund Green Light Capital, David Ainhorn, is increasing his bet on gold, believing that the Federal Reserve will be unable to control inflation and will be forced to maintain its restrictive monetary policy for longer than expected. It is understood that Green Light Capital has been actively buying into the world's largest gold exchange traded fund - SPRDGoldShares (GLD).

Einhorn said, "We hold far more gold than just positions in GLD. We also hold physical gold bars, and gold is one of the most important investments. There are issues with the overall monetary and fiscal policies of the United States, and if both policies are too loose, I believe the deficit will eventually become a real problem. Investing in gold is one way for us to hedge against potential adverse situations in the future."

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