The Comex gold futures have declined 1.38% in the past two days and 3.19% week-to Thursday to end at $1,122.20. From the trough on 5 August, the gold futures have rebounded 4.04% but have dropped 2.58% from the recent peak. The S&P 500 Index has climbed 0.87% and the Euro Stoxx 50 Index has risen 1.03% this week while the crude oil futures have rebounded 5.22%. The Dollar Index has also risen 0.63% this week to 95.61. As the VIX plunged from 40.74% end of Monday to 26.10% on Thursday, the U.S. ten-year Treasury bond yield surged 15bp to 2.1841% and the German ten-year Bund yield surged 18bp to 0.742%.

All about the U.S. Data
The Chinese domestic stock market rebounded over five percent on Thursday as the state started to buy stocks after five consecutive days of downturn, mitigating the fear of an emerging market crisis. The stock markets globally also revived as the U.S. data surprised on the upside. On Thursday, the U.S. reported that its Q2 GDP grew at an annualized rate of 3.7% compared to 0.6% in Q1, helped by strong household and corporate spending as well as a rise in inventories. Excluding the impact from the decline in the oil sector capex, the U.S. economy actually grew at an annualized 4.5% rate according to Bloomberg. However, as several of the Fed governors have mentioned, the global development has complicated the outlook for the Fed to raise rates in September. In the Jackson Hole gathering, the central bankers will focus on the inflation and monetary policy outlook, with the vice chairman of the Fed commenting on the prospect of a Fed rate hike this year.

Gold Holdings
From a low of 1,509.9189 metric tons on 11 August, the gold-backed ETF holdings have rebounded almost 20 metric tons as of today, in line with a two percent increase in the gold futures prices. During this time, the global stock markets have corrected over 5% while the U.S. ten-year Treasury yield has risen 4bp. Gold has been acting as a safe haven despite what the doomsayers are saying.

What to Monitor
We will monitor the August final manufacturing index in China, the Eurozone, the U.K, and the U.S. on 1 September, the U.S. August ADP private payrolls on 2 September, the ECB interest rate announcement and press conference on 3 September as well as the U.S. August non-farm payrolls and the unemployment rate on 4 September.

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