On August 23rd, according to Caixin's report, analysts are focused on the Jackson Hole Global Central Bank Annual Meeting today to see if any signals about interest rate cuts will be released. Analysts believe that if there is a hint of a 50bp rate cut at the annual meeting, the US dollar index may continue to weaken, while gold and US stocks are expected to continue to rise. The World Gold Council also pointed out that based on the average performance of gold in the past ten years, gold prices tend to rise initially after the Jackson Hole annual meeting.

Gold futures continued their upward trend today, surpassing the $2500 level and rising by 0.64% intraday. The recent strong performance of gold is mainly driven by investors' expectations of a rate cut by the Federal Reserve in September, a significant decline in the US dollar, and a drop in US bond yields. In addition, the significant increase in net long positions in COMEX and the inflow of global gold ETFs have also provided support for the upward movement of gold prices. Some institutions predict that gold prices could rise to $2600 per ounce by the end of this year.

Focus on the Jackson Hole Central Bank Annual Meeting.

Many industry analysts believe that the highlight of today and this week is the speech by Powell at the Jackson Hole Central Bank Annual Meeting at 22:00. The information about interest rate cuts released at this meeting will have an impact on the movement of gold and the US dollar index.

For example, UBS Wealth Management pointed out that the Jackson Hole Global Central Bank Annual Meeting will be held this Friday, and the market is looking forward to Fed Chairman Powell delivering more signals about interest rate cuts in his keynote speech.

Jerry Chen, a senior analyst at CMB International, told Caixin reporters that a rate cut in September is almost a certainty, but there is still uncertainty about the extent of the rate cut and the future path. If he only mentions a moderate rate cut (excluding or downplaying the possibility of a 50bp rate cut in September), it would simply align with the current mainstream expectations and may not bring any additional positive news to the market. This could potentially trigger a rebound in the US dollar index.

"But once there is a hint of a 50bp rate cut in September, the US dollar index may continue to weaken, while gold and US stocks are expected to continue to rise. This also implies the Fed's pessimism about the economic outlook," added Jerry Chen.

At the China Ping An 2024 mid-term performance conference today, Chief Investment Officer Deng Bin also stated that overseas interest rate cuts are good news for the capital market. He predicts that there is a high probability of a 25 bp rate cut in September and another rate cut by the end of the year.

How will the Jackson Hole Symposium affect the gold market? According to analysis by the World Gold Council, based on the average performance of gold over the past ten years, gold prices initially strengthen after the start of the Jackson Hole Symposium. However, a few weeks later, as bond yields rise, gold prices weaken. If Fed Chairman Powell's remarks at the Jackson Hole Symposium are overly dovish, there is a risk of market overestimating future rate cuts.

If the expectation of rate cuts cannot further increase, the US dollar index is expected to find support near the 100 level, which is both the previous low and where the 200-week moving average is located. At the same time, the RSI indicator, which is about to enter the oversold zone, also suggests the possibility of a short-term rebound. However, after breaking the upward trendline since 2021, the overall trend of the index has turned downward. If it further breaks the key support mentioned above, it may test the 96 level. This is Jerry Chen's expectation for the trend of the US dollar index.

Gold retests the 2500 level and is expected to rise to 2600.

In fact, gold has been steadily rising recently. Today, spot gold continues to rise, retesting the 2500 level and rising 0.64% intraday. The recent market volatility has been mainly influenced by expectations of the Fed's policy, especially the market's anticipation of Fed Chairman Powell's speech at the Jackson Hole Symposium.

UBS Wealth Management Office stated that this is mainly due to the weakening of the US dollar and the increased expectation of a rate cut by the Fed in September. The US dollar index fell by about 0.7% last week, marking the fourth consecutive week of decline. In addition, the escalating tension in the Middle East has also driven demand for gold as a safe-haven asset.

"According to our weekly gold return attribution model, the strengthening expectation of a Fed rate cut in September, the significant decline in the US dollar, and the decline in US bond yields have been key drivers of the upward trend in gold," said a representative of the World Gold Council to Cailian Press. At the same time, the significant increase in COMEX net long positions and the significant improvement in global gold ETF inflows have also enhanced the upward trend in gold. In addition, high geopolitical risks provide support for gold, apart from its intrinsic value.

Jerry Chen believes that Powell's speech today will likely determine the direction of gold prices. However, the overnight implied volatility of gold is only 14%, even lower than its one-week volatility, which means that Powell's remarks tonight are unlikely to be too surprising. Gold prices are likely to range between 2462.75 and 2506.75.

"The current gold market is at a critical juncture, with rate cuts by central banks in developed markets, and the resulting improvement in investment demand (such as the net inflow of gold ETFs, as we have seen in recent months), expected to support gold prices. Additionally, increased volatility in the equity markets and the rise in geopolitical risks are expected to enhance investors' need for risk hedging, benefiting gold investment demand. However, risks should also be considered, such as the slowdown in the pace of global central bank gold purchases." According to a spokesperson from the World Gold Council, investors should focus on the strategic role of gold in their investment portfolios and pay attention to its long-term performance.

UBS Wealth Management predicts that gold prices could rise to $2600 per ounce by the end of this year, considering the strong demand from central banks and exchange-traded funds (ETFs). Gold will serve as an effective hedge against geopolitical risks, inflation, and excessive deficits.