On Thursday (July 23, Beijing time) in early Asian trading, spot gold was trading around $4,126 per ounce. Gold prices touched a two-week high of $4,165.92 per ounce on Wednesday, mainly driven by a weaker dollar and technical buying. Meanwhile, escalating hostilities between the US and Iran and increased supply risks in the Strait of Hormuz led to a more than 2% rise in oil prices on Wednesday. US crude oil is currently trading around $88.17 per barrel and may test the $90 per barrel mark during the day.

Key Focus Today

stock market

U.S. stocks fell on Wednesday, with the Nasdaq Composite leading the decline, falling 0.57% to 25,690.90 points. The S&P 500 dipped 0.14% to 7,498.96 points, while the Dow Jones Industrial Average was virtually unchanged, falling only 0.01% to close at 52,218.58 points. Investors remained cautious ahead of second-quarter earnings reports from tech giants like Alphabet and Tesla after the market closed, assessing the health of the artificial intelligence-driven rally. The Philadelphia Semiconductor Index rose 0.4%, marking its third consecutive day of gains, after recovering somewhat following confirmation of a bear market, but weakness in software stocks and mixed performance among chip stocks dampened momentum. After-hours earnings reports showed Alphabet closing down 1.5% (due to concerns over the delayed release of its core AI model), Tesla fell 1.3% in regular trading and further declined 3% in after-hours trading after the company's second-quarter free cash flow turned negative (its first in over two years), while Texas Instruments closed up 1% in regular trading but fell in after-hours trading despite exceeding its quarterly revenue forecast. Meanwhile, escalating conflict in the Middle East pushed crude oil futures to a six-week high, as Iranian-backed Houthi rebels in Yemen threatened Red Sea shipping and US President Trump vowed fierce retaliation against Iran's attack on ships in the Strait of Hormuz. High oil prices exacerbated inflation concerns, prompting investors to turn to defensive sectors such as utilities, while energy and materials stocks rose to reflect inflationary factors. Regarding the Federal Reserve's interest rates, surveys predict no change for the remainder of 2026, but the risk of a rate hike remains high. The FedWatch tool shows a roughly 66% probability of maintaining rates next week. In individual stock highlights, Advanced Micro Devices surged 19.8% after announcing over $60 billion in new orders in the fourth quarter, leading the S&P 500 and boosting Dell Technologies by 9.3%.

Gold Market

Gold prices hit a two-week high on Wednesday, with spot gold rising 1.28% to $4,129.79 an ounce, after hitting a high of $4,165.92, the highest since July 7, mainly driven by a weaker dollar and technical buying. FXTM's senior research analyst noted that a weaker dollar and bargain hunting provided new momentum, but also warned that rising oil prices could limit upside potential. Geopolitically, US Secretary of State Rubio stated his continued willingness to negotiate with Iran but claimed Tehran was not serious, while threats from the Iranian-backed Houthi rebels in Yemen caused four oil tankers carrying Saudi crude to turn back in the Red Sea, pushing oil prices to a near six-week high and exacerbating market risk aversion. Meanwhile, investors are closely watching the Federal Reserve's policy outlook. Surveys indicate the Fed may keep interest rates unchanged for the remainder of 2026, but the market expects two rate hikes before the end of March next year. The CME FedWatch tool shows a 76% probability of a September rate hike, and next week's Federal Open Market Committee meeting will provide more clues about the monetary policy stance. In other precious metals, spot silver rose 1.56% to $59.68, platinum rose 0.7% to $1640.63, and palladium rose 1.4% to $1299.47.

oil market

Oil prices closed at their highest level since June 11 on Wednesday, with Brent crude rising 2.72% to $93.84 a barrel (it touched $95.44 during the session) and WTI crude rising 2.29% to $86.48 a barrel. This was mainly due to the escalating hostilities between the United States and Iran, increased supply risks in the Strait of Hormuz, and the Iranian-backed Houthi rebels in Yemen threatening to attack Saudi oil tankers in the Bab el-Mandeb Strait and declaring a naval blockade, opening a new front and causing five oil tankers to change course in the Red Sea to avoid the strait. Brent crude oil three-month spread widened to $9.26 per barrel (the largest since May 22), reflecting tighter short-term supply. The US military struck Iran for the 11th consecutive night, Kuwaiti military intercepted an Iranian drone, Trump threatened to bomb infrastructure if Iran attacked ships in the Strait of Hormuz, and the Iranian Revolutionary Guard warned of mines laid along the southern coast of the Strait of Hormuz. The EU Navy advised ships with ties to Israel, the US, or Saudi Arabia to avoid transiting the Red Sea and the Gulf of Aden. Asian refineries sought to transport Saudi crude oil via the Suez Canal or around Africa. Meanwhile, data from the US Energy Information Administration showed that US crude oil inventories increased by 2 million barrels to 411.7 million barrels in the week ending July 17 (compared to an expected decrease of 1.1 million barrels), due to lower refinery throughput, reduced exports, and increased imports. However, the market is more focused on the impact of geopolitical risks on supply.

Foreign exchange market

The dollar index fell 0.09% to 101.12 on Wednesday, as weak U.S. inflation reduced the urgency for the Federal Reserve to further tighten policy. Meanwhile, escalating conflict in the Middle East pushed Brent crude to a six-week high, and geopolitical risks also dampened market sentiment. The dollar rebounded from a near 40-year low against the yen on Wednesday as media reports indicated that Bank of Japan officials were open to raising interest rates at a faster pace than widely expected, while traders assessed the possibility of intervention by Tokyo authorities. The dollar closed down 0.1% at 163.13 against the yen. Japanese Finance Minister Satsuki Katayama reiterated that Japan would act decisively if necessary to curb excessive yen depreciation, but analysts pointed out that intervention could only buy time and could not reverse the trend unless the Bank of Japan's policy truly shifted. Market concerns about political intervention in monetary policy were exacerbated by the government's retention of language urging the central bank to cooperate with its policies in the final version of the economic blueprint. In the UK, a larger-than-expected drop in June inflation (driven by lower gasoline prices) reduced the likelihood of a Bank of England rate hike, and the pound rose slightly by 0.07% against the dollar to 1.3384. The money market has fully priced in a 25 basis point rate hike this year and a probability of a second rate hike of about 60%.

International News

Trump Threatens to Destroy Power Plant by Iran US President Trump stated on the 22nd that from now on, whenever the Islamic Republic of Iran fires on ships in the Strait of Hormuz, whether by missiles, rockets, drones, or any other equipment or weapon, the United States will bomb and destroy a bridge or power plant, including facilities located near or within the capital, Tehran. The probability of a Fed rate hike in July rises to 34.7%, and the probability of at least a 50 basis point rate hike this year rises to 56.8%. According to CME's "FedWatch": the probability of the Fed keeping interest rates unchanged in July is 65.3%, and the cumulative probability of a 25 basis point rate hike is 34.7%. The probability of the Fed keeping interest rates unchanged by September is 22%, the cumulative probability of a 25 basis point rate hike is 54.9%, and the cumulative probability of a 50 basis point rate hike is 23%. The probability of the Fed keeping interest rates unchanged by December is 9.5%, the cumulative probability of a 25 basis point rate hike is 33.7%, and the probability of at least a 50 basis point rate hike is 56.8%. Iranian Military Source: Iran Will Retaliate if US Attacks Bridges or Power Plants On the 22nd local time, an Iranian military source responded to the latest US threats, stating that Iran has a firm will to exercise its sovereignty over the Strait of Hormuz and will never allow the Strait of Hormuz to become a tool of threats against Iran again. The source stated that as long as ships coordinate with Iran and follow the arrangements set by Iran, passage through the Strait of Hormuz is safe. Otherwise, Iran will never relinquish its firm will to control the Strait to ensure its long-term security. The source emphasized that if the US attacks Iranian bridges or power plants, Iran will retaliate with reciprocal strikes against regional infrastructure and bridges, including energy facilities in which the US has interests. Earlier that day, US President Trump posted on social media that from now on, if Iran fires at ships in the Strait of Hormuz, whether using missiles, rockets, drones, or other devices or weapons, the US will bomb and destroy an Iranian bridge or power plant. (CCTV News) US House Passes Bill Restricting Stock Trading by Lawmakers According to Politico, the US House of Representatives passed a bill on Wednesday aimed at restricting members of Congress and their families from buying and selling stocks; however, the bill has caused division within the party as some Democrats believe it is not strong enough. The bill, titled the "Stop Insider Trading Act," is the first congressional stock trading ban bill to be voted on in a full House session, ultimately passing with 232 votes to 198, including 13 Democratic votes. Of the 93 lawmakers who co-sponsored the bill, only two are Democrats. Another, more restrictive bill—requiring lawmakers and their families to sell their current personal stock holdings—while receiving broader bipartisan support, failed to reach a full House vote. Most Democrats believe the passed measure is insufficient because it does not include a mandatory sale of existing holdings. The bill will be sent to the Senate for consideration. Iranian Revolutionary Guard: Ships Should Not Use Alternative Routes to Enter or Exit the Strait of Hormuz The Iranian Islamic Revolutionary Guard Corps Navy Command stated on the 22nd that the routes to and from the Strait of Hormuz are clear and completely under Iranian control. Any alternative shipping routes are unsafe and extremely dangerous. All parties are warned against using these routes, as it will lead to serious and irreversible consequences. The EU failed to reach an agreement on the 21st round of sanctions against Russia. On the 22nd local time, diplomatic officials from EU member states held a meeting but again failed to reach an agreement on the 21st round of sanctions against Russia. It is understood that the new sanctions aim to cripple the Russian banking sector. However, Greece hopes the EU will ease restrictions on Russian liquefied natural gas (LNG) supplies. Last week, Greece stated that the impending ban on the transfer of Russian LNG would only shift market share outside Europe and would not affect Russia's revenue. (CCTV News) Iranian Parliament Speaker: If Iran Cannot Sell Oil, Other Countries Shouldn't Sell Either Iranian Parliament Speaker Ghalibaf posted on social media: "The logic of this war is clear: either everyone can sell oil, or no one can. If we cannot sell oil in the region, other countries shouldn't sell either." He stated that if Iran's security is not guaranteed, no infrastructure will be safe. Ghalibaf stated that the security of the Strait of Hormuz depends on the absence of US troops in the region. He reiterated that the situation in the Strait of Hormuz will not return to its pre-war state.

Domestic News

Wang Yi Meets with US Secretary of State Rubio Wang Yi, member of the Political Bureau of the CPC Central Committee and Foreign Minister, met with US Secretary of State Rubio in Manila on the 22nd. Wang Yi stated that this year is a "big year" for China-US relations. The two heads of state successfully held a historic meeting in Beijing, defining the constructive strategic and stable relationship between China and the US and outlining directions for joint efforts. This is an important step forward for the two major powers in exploring the path of peaceful coexistence, conforming to the fundamental interests of the two peoples and meeting the common expectations of the international community. Our responsibility now is to follow the path set by the two heads of state, eliminate interference and overcome obstacles, and ensure that the consensus reached by the leaders is translated into consensus and action across the entire government and all sectors, promoting world peace and tranquility through strategic stability between China and the US, and providing important impetus for international cooperation through constructive interaction between China and the US. Wang Yi also clarified China's solemn position on the recent series of negative words and actions by the US, demanding that the US respect China's core interests, adhere to the one-China principle, effectively manage contradictions and differences, address China's legitimate concerns, and make this year of opportunity for China-US relations a reality. The two sides also exchanged views on international and regional hotspots. Both sides agreed that the meeting was pragmatic, positive, and constructive, and agreed to jointly implement the important consensus reached by the two heads of state, leverage political and diplomatic channels, prepare for the next stage of high-level exchanges, and promote substantial progress in the constructive strategic and stable relationship between China and the United States. (Xinhua)