On Wednesday (August 5, Beijing time) in early Asian trading, spot gold was trading around $4,083 per ounce. Signals from Qatari and US officials that progress had been made in US-Iran negotiations boosted expectations for a diplomatic solution to the Iranian conflict and improved oil supplies through the Strait of Hormuz, easing inflation concerns and lowering expectations for a Fed rate hike, thus providing support for the market. Oil prices plunged more than 6% on Tuesday, with US crude currently trading around $75.34 per barrel.

Key Focus Today

stock market

U.S. stocks closed at record highs on Tuesday, with the Dow Jones Industrial Average and S&P 500 rising 1.71% and 1.79% respectively, while the Nasdaq Composite surged 2.59%, primarily driven by strong earnings reports from AI-related companies such as Caterpillar and Palantir. Palantir's stock price soared 29.5% after it raised its annual revenue forecast, while Caterpillar jumped 5.6% due to demand for power generation and construction equipment driven by AI data center construction, contributing approximately 280 points to the Dow's gains. Meanwhile, reports that Qatar and the U.S. indicated an agreement to resolve the Iranian conflict through diplomatic channels and reopen the Strait of Hormuz could be reached within the next two days caused oil prices to fall, weakening market expectations for a September rate hike by the Federal Reserve (the probability dropped from 67.2% to 56.9%) and leading to a decline in U.S. Treasury yields, further supporting the stock market. During this earnings season, investors are closely watching the performance of AI companies to assess the return on their massive investments, and so far, 85.2% of the S&P 500 companies that have released their quarterly reports have exceeded expectations, far higher than the long-term average of 67.5%. On the economic data front, while job openings decreased in the US in June, hiring increased and layoffs declined, indicating a stable labor market. The market is focused on Friday's non-farm payroll report. In terms of sectors, the Philadelphia Semiconductor Index surged 6.6%, with the technology sector leading the S&P 500's 11 sectors with a gain of 4.1%. Among individual stocks, SpaceX fell about 4% after releasing its first earnings report after hours, while McDonald's and Pfizer rose 1.2% and 1.5%, respectively.

Gold Market

Gold prices rose 0.54% on Tuesday, with spot gold settling at $4,077.21 per ounce, mainly boosted by a sharp decline in oil prices. Comments from Qatari and U.S. officials raised expectations for a diplomatic solution to the Iranian conflict and improved oil supplies through the Strait of Hormuz. The drop in oil prices eased inflation concerns and lowered expectations for a Federal Reserve rate hike, thus supporting non-yielding gold. Bart Melek, global head of commodities strategy at TD Securities, pointed out that lower oil prices have impacted the interest rate outlook, with short-term interest rates declining slightly, which is one of the driving factors for gold prices. Meanwhile, the market is closely watching the upcoming US employment data this week, including Wednesday's ADP employment report and Friday's non-farm payroll report, for further clues about the Federal Reserve's policy direction. In other precious metals, spot silver rose 2.3% to $59.49 per ounce, while platinum and palladium both climbed more than 7%, reaching $1742.63 and $1354.27 respectively.

oil market

Oil prices fell sharply on Tuesday, with Brent crude down 5.79% to settle at $78.69 a barrel and WTI crude down 6.15% to settle at $75.14, both hitting three-week lows. This was mainly due to signals from Qatari and U.S. officials that progress had been made in U.S.-Iran negotiations, increasing market hopes for a diplomatic solution to the Iranian conflict and improved oil transport through the Strait of Hormuz, thus significantly reducing the geopolitical risk premium in oil prices. US Secretary of State Marco Rubio confirmed progress in negotiations with Iran and Oman regarding allowing more ships to pass through the Strait of Hormuz, but no final agreement has been reached. Treasury Secretary Bessant had earlier stated that an agreement could be reached as early as Tuesday or Wednesday. The Qatari Foreign Ministry also confirmed that diplomatic efforts are ongoing, and that the Emir of Qatar discussed de-escalation and facilitating convergence of US and Iranian positions with Trump. Shipping traffic in the key Persian Gulf waterway remained largely unchanged at the beginning of the week, and Goldman Sachs expects Brent crude oil prices to fluctuate between $80 and $90 per barrel until a new agreement is confirmed or the situation escalates significantly.

Foreign exchange market

The dollar index dipped slightly on Tuesday. The dollar has been under pressure recently, mainly due to the Federal Reserve keeping interest rates unchanged and the decline in oil prices following its intervention. Although Qatar said it had made progress in mediating the war between the US and Iran, Tehran denied Trump’s claim that negotiations had begun. The yen held onto most of its post-intervention gains on Tuesday but saw a slight pullback, with the dollar/yen pair closing at 157.69. While recovering from Monday's three-month low of 155.20, it remained well below the forty-year high of 163.99 reached in July. This followed a rare coordinated intervention by Japan and the US on Friday, with the yen surging as much as 5% over the past three trading days. Axel Merk, chief investment officer at Merk Investments, noted that the coordinated action aimed to signal to the market against excessive shorting of the yen, while analysts at TS Lombard cautioned that short positions in the yen remained relatively high due to significantly increased intervention risks. A market source revealed that the US Treasury unusually used euros instead of selling dollars in the intervention, intended to help Japan strengthen the yen while avoiding the market's perception that Washington wanted a weaker dollar. Analysts at BNP Paribas believe that although multilateral interventions typically occur only during periods of high volatility, the fundamental outlook for the yen remains unchanged, and they still expect the dollar/yen pair to be higher than current levels by the end of the year.

International News

The probability of a 25 basis point rate hike by the Federal Reserve in September is 58.4%, according to CME's "FedWatch". The probability of the Fed keeping rates unchanged by September is 41.6%, with a cumulative probability of a 25 basis point hike of 58.4%. The probability of the Fed keeping rates unchanged by October is 30.5%, with a cumulative probability of a 25 basis point hike of 53.9% and a cumulative probability of a 50 basis point hike of 15.5%. US missile stockpiles are nearing critical levels . According to sources, since the start of the Iran-Iraq War, the US has consumed nearly 80% of its THAAD interceptor missiles and about 50% of its Patriot missiles. Senior US military commanders have warned that the Pentagon's missile stockpile is at a "dangerously low level," raising concerns about the US military's readiness for future conflicts. Gulf allies reliant on the US air defense system are also worried that missile shortages could weaken their ability to defend against potential Iranian missile and drone attacks. US Official: Temporary Shipping Routes in the Strait of Hormuz Require No Permits or Fees; Trump Remains Open for Negotiations with Iran A US official stated that all temporary shipping routes in the Strait of Hormuz are unimpeded, requiring no permits, approvals, or fees. This official refuted reports that Iran might control shipping in the strait under a potential agreement. He stated that the Strait of Hormuz is an international waterway, and no party has the right to control the waterway or ship passage. A White House official stated that Trump "holds all the cards" and, at the request of US regional allies, has reserved the possibility of negotiations with Iran. Iran: "Positive Progress" in Strait of Hormuz Negotiations with Oman Iranian Foreign Ministry spokesman Bagae said on the 4th that Iran is still negotiating with Oman on the Strait of Hormuz, and that the negotiations have made "positive progress" on both technical and political levels. According to the Islamic Republic News Agency (IRNA), Bagae said that the focus of the negotiations is to determine safe shipping routes. Iran is cooperating with Oman to develop the "necessary mechanisms" for managing shipping in the strait, and the final results will be announced after all negotiations are completed. (Xinhua) Iranian Official: US Attempts to Obstruct Iran-Oman Talks on Strait of Hormuz Iran's Press TV reported on the 4th, citing a senior Iranian official, that the US government is attempting to obstruct ongoing negotiations between Iran and Oman regarding the management of the Strait of Hormuz. The report stated that despite US obstruction, negotiations between Iran and Oman on the Strait of Hormuz have entered a "new phase." US Secretary of State Marco Rubio told the media at the State Department on the 4th that the most pressing and pressing issue is the Strait of Hormuz, and the US is participating in relevant dialogues and negotiations between Oman and Iran to discuss how to allow more ships to pass safely through the strait in the short term. (Xinhua) Iranian Source Says Iran Hopes to Control Shipping Through the Strait of Hormuz According to foreign media reports on the 4th, citing a senior Iranian source, Iran and Oman are discussing a plan to reopen shipping through the Strait of Hormuz, and Iran hopes to control shipping through the strait based on this plan. The report stated that Iran will also monitor the movement of ships leaving the Strait of Hormuz and has the capability to intervene if necessary. "This is the general idea behind the current discussions, and Oman will allow ships to leave after informing Iran," the source said. The source also stated, "Iran is unlikely to change its position, and it is unlikely to accept any other alternative to reopening the Strait of Hormuz." Iranian Foreign Ministry spokesman Baghae stated in a program broadcast on the Islamic Republic of Iran Broadcasting on the 2nd that Iran and Oman are working to delineate a new shipping route in the Strait of Hormuz under a separation of navigation regime to ensure the sovereign rights of both sides and Iran's national interests and security. (Xinhua) Qatar: All parties are striving to resolve the US-Iran conflict through diplomatic means Qatar Foreign Ministry spokesman Majed Al Ansari stated on Tuesday that efforts are currently underway to resolve the US-Iran conflict through diplomatic means. He pointed out that mediators, including Qatar, Pakistan, and Oman, are closely coordinating to promote negotiations and the exchange of draft agreements. He stated that the current priority is to resume negotiations as soon as possible. Other reports indicate that Qatar has stated it has drafted a text for a possible US-Iran agreement, and the draft is circulating among the parties. However, Qatar also stated that there is currently no set agenda regarding direct negotiations between the US and Iran.

Domestic News

The China Federation of Logistics and Purchasing (CFLP) released the July China Bulk Commodity Price Index today (July 5th). The index showed a slight month-on-month decline but maintained a significant year-on-year increase, indicating a generally stable market foundation. The July China Bulk Commodity Price Index was 128.6 points, down 1.3% month-on-month but up 15.5% year-on-year. Among the 50 key bulk commodities monitored by the CFLP, 14 saw month-on-month price increases in July. Coke, praseodymium oxide, and corrugated paper saw the largest increases, rising 7.1%, 6.4%, and 5.6% respectively. (CCTV News) Orders for flights seeking cooler temperatures surge by 500% . The 2026 summer air travel season is already halfway through, and this year's market is characterized by a "late start and strong finish." With many parts of the country experiencing sustained high temperatures recently, many travelers have adjusted their travel plans, turning their attention to destinations with natural "air conditioning" properties. Data shows that searches for keywords related to "summer retreat" and "nighttime tourism" have increased by 238% month-on-month since July. A reporter's investigation found that, as of now, nearly half of the 20 routes with the highest increase in flight bookings this summer are "cool-off routes." Among them, the Wuhu-Guiyang route saw a fivefold increase. In addition, the Zhengzhou-Mangshi and Guangzhou-Yanji routes both saw increases of over three times, while the Huizhou-Taiyuan route saw a 2.4-fold increase in flight bookings. (CCTV Finance)