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stimulated by the european central bank's announcement of a rate cut and the federal reserve's expectations of a rate cut, gold and silver prices soared. tonight, spot gold broke through $2,540/ounce, setting a new record high. as of press time, the increase was 1.28%; spot silver rose by more than 2% during the day. affected by this, u.s. gold stocks strengthened across the board, with colderen mining soaring by more than 11% and hecla mining soaring by more than 5%.

on the news front, the european central bank announced its latest interest rate decision, lowering the key deposit rate by 25 basis points, while the main refinancing and marginal lending rates were lowered by 60 basis points. in addition, the u.s. ppi data for august and the number of first-time unemployment claims for the week of september 7 were also released. the market generally expects the federal reserve to cut interest rates by 25 basis points at its meeting next week, and the total rate cut by the federal reserve in 2024 is expected to be 100 basis points.

on the eve of the fed's interest rate cut cycle, wall street's outlook on the u.s. stock market is becoming increasingly optimistic. some wall street analysts believe that the u.s. stock market may usher in a period of major rebound. according to bespoke investment group, october has always been the month with the strongest stock market surge.

gold surges

this evening, the spot gold price continued to soar, breaking through $2,540/ounce, setting a new all-time high. as of press time, the increase was 1.28%; spot silver rose 2.3% during the day and is now trading at $29.34/ounce.

on the news front, the european central bank announced its latest interest rate decision, cutting the key deposit rate by 25 basis points and the main refinancing and marginal lending rates by 60 basis points.

in addition, the u.s. ppi data for august and the number of first-time unemployment claims for the week of september 7 were also released, further increasing expectations for a fed rate cut.

on the evening of september 12, beijing time, data released by the u.s. department of labor showed that the u.s. ppi increased by 1.7% year-on-year in august, the lowest since february; it increased by 0.2% month-on-month, 0.1% higher than expected; the core ppi in august increased by 2.4% year-on-year, in line with expectations and consistent with the previous value; it increased by 0.3% month-on-month, higher than expected; the price of final demand services rose by 0.4% in august, down 0.3% in july,

according to data released by the u.s. department of labor, the number of first-time applications for unemployment benefits in the united states in the week of september 7 was 230,000, which was in line with expectations of 227,000 and the previous value of 227,000. this was the first increase in three weeks and was consistent with the trend of gradually slowing hiring.

in addition, the number of people continuing to apply for unemployment benefits in the united states for the week ending august 31 was 1.85 million, a slight increase of 5,000. after soaring to the level since the end of 2021 in july, the number of people continuing to apply for unemployment benefits has mostly been declining in august. this decline is consistent with the decline in the unemployment rate last month.

the four-week moving average rose to 230,750, the first increase in five weeks. jobless claims have been subdued in recent weeks. economists have been watching for signs of a labor market slump.

it should be noted that last week's data included the us labor day holiday, and the number of initial unemployment claims tends to fluctuate before and after public holidays.

as labor demand slows, the market generally expects the federal reserve to cut interest rates by 25 basis points at its meeting next week, and the total rate cuts by the federal reserve in 2024 are expected to be 100 basis points.

after the data was released, the us dollar index rose in the short term and is now at 101.76. after the opening of the us stock market, the three major indexes showed divergent trends. as of 22:30 beijing time, the dow jones industrial average fell 0.12%, the nasdaq rose 0.45%, and the s&p 500 rose 0.2%. among them, gold stocks strengthened across the board, with colderen mining soaring more than 11% and hecla mining soaring more than 5%.

adam hamilton, founder of financial consulting firm zeal intelligence, said that gold prices have reached unprecedented levels, rising 38.7% in less than 11 months, setting new all-time highs. as u.s. investors shift from traditional stocks to gold and the artificial intelligence (ai) bubble bursts, gold prices may rise further.

“the latest inflation report we saw confirms a trend we’ve recognized over the last few months, which is that the fed is now less focused on inflation and more focused on economic growth, and that completely changes the market’s reaction,” said lauren goodwin, chief market strategist at new york life investments.

on september 11 local time, goldman sachs group ceo david solomon pointed out that due to signs of weakness in the u.s. job market, the federal reserve has reason to propose a 50 basis point interest rate cut instead of the standard 25 basis points. "i think the possibility of this is around 30%."

solomon said his best guess is that the fed could cut rates by a quarter point in september and possibly two or three more times before the end of the year, and expects a soft landing for the u.s. economy.

optimistic expectations

on the eve of the federal reserve's interest rate cut cycle, wall street's outlook on the u.s. stock market is becoming increasingly optimistic. some wall street analysts believe that after experiencing the "curse" in september, the u.s. stock market may usher in a period of major rebound.

according to bespoke investment group, october is historically the strongest month for stocks. ned davis research said that the u.s. stock market could see a "continued upswing" that will be supported by fourth-quarter seasonal trends. that is, october to december are usually the three strongest months of the year.

jay hatfield, ceo of infrastructure capital advisors, said in a recent report that the latest employment report remains consistent with a growing economy and validates his s&p 500 target of 6,000, which implies an 11% upside.

michael hartnett, chief investment strategist at bank of america, pointed out in his latest report that the probability of a "hard landing" in the united states is generally underestimated. even if the federal reserve only cuts interest rates by 25 basis points in its first rate cut, it will still cut interest rates significantly later. he believes that the most advantageous operation now is to "sell the first rate cut" and wait for a better time to enter the market for risky assets.

a model by jpmorgan analysts shows that as of last wednesday, stock and investment-grade credit markets expected the probability of a u.s. recession to be only 9%, while commodity and bond markets priced in higher probabilities of recession, at 62% and 70%, respectively.

ubs group ag ceo sergio ermotti believes the long-awaited soft landing for the u.s. economy is still achievable, adding that other economic data still seems to point to that scenario.

however, many institutions have also warned of the risk of a correction in the us stock market. among them, morgan stanley strategist michael wilson believes that if the federal reserve cuts interest rates sharply this month, the us stock market may face the risk of further unwinding of yen carry trades.

priya misra, portfolio manager at jpmorgan asset management, warned: "i don't think any market has really priced in a reasonable probability of recession, but all the data show that recession risks are increasing. although there is still debate over whether the fed will cut interest rates by 25 basis points or 50 basis points in september, if a recession does come, all markets will be affected. it will take some time for the rate cut to penetrate the economy."

rbc capital markets strategists said u.s. stocks could remain volatile and fall further in the near term due to risks from seasonal factors, sentiment and the presidential election. they warned that if concerns about a hard landing escalate, the risk of a growth scare causing a stock market decline of 14% to 20% would certainly rise.