On Thursday (August 20, Beijing time) in early Asian trading, spot gold was trading around $4,516 per ounce. Gold prices surged more than 4% on Wednesday, hitting a more than two-month high of $4,527.49 per ounce. Stimulated by the US Treasury's unexpected announcement to double the size of its long-term Treasury repurchase operations to support market liquidity, the 30-year US Treasury yield fell sharply from its near 19-year high, and the dollar hit a near three-month low. US crude oil was trading around $84.54 per barrel, with the situation in the Middle East continuing to support oil prices. Trump announced the "toughest" economic sanctions against Iran and warned other countries not to provide any support.

Key Focus Today

stock market

U.S. stocks closed slightly higher on Wednesday, with the Dow Jones Industrial Average rising 0.22% to 53,463.05, the S&P 500 gaining 0.21% to 7,707.98, and the Nasdaq Composite climbing 0.16% to 26,331.09. This was primarily driven by a decline in Treasury yields from multi-year highs, boosting risk appetite. Meanwhile, vaccine maker Moderna surged nearly 177% on a breakthrough in its personalized cancer therapy clinical trial, leading to the healthcare sector's biggest one-day gain since April 2025 and pushing the S&P 500 healthcare index to a record high. Investors reacted mutedly to the minutes of the Federal Reserve's July meeting. Although the minutes showed policymakers' growing concerns about inflation and several officials preparing to raise interest rates, the Treasury's announcement of doubling the size of its long-term bond repurchase operations to support liquidity caused both 30-year and 10-year Treasury yields to fall, easing recent selling pressure on AI-related technology stocks due to rising interest rates. However, as the deal progressed, gains narrowed, with analysts suggesting some profit-taking and the persistent issue of persistently high interest rates remaining unresolved. In terms of sectors, consumer discretionary rose 2%, following healthcare, while the industrial and information technology sectors (dragged down by chip stocks) fell 0.9% and 0.7% respectively, with the Philadelphia Semiconductor Index closing down 2%. Among other stocks, Merck surged 12.6%, Marvell jumped 9.9% due to its partnership with Google, Target and Lowe's rose after their earnings reports, and Estée Lauder jumped 16.3%, amid ongoing disagreements regarding the Middle East situation.

Gold Market

Gold prices surged more than 4% on Wednesday, hitting a more than two-month high of $4,527.49 per ounce, stimulated by the U.S. Treasury's unexpected announcement that it would double the size of its long-term Treasury repurchase operations to support market liquidity, while the 30-year Treasury yield fell sharply from its near 19-year high. Gold prices have technically broken through the 100-day moving average near $4,381. Although the minutes of the Fed's July meeting showed policymakers' growing concerns about inflation and several officials preparing to raise interest rates, recent weak economic data has led the market to expect a 65% probability of keeping rates unchanged in September, further weakening support for the dollar and yields. Other precious metals also strengthened, with spot silver rising 5.78%, platinum rising 5.1%, and palladium rising 2.7%, all four metals poised for their biggest single-day gains in two weeks.

oil market

Oil prices closed near a four-week high on Wednesday, driven by a significant escalation of geopolitical tensions in the Middle East. Brent crude rose 0.29% to $91.54 a barrel, while WTI crude fell 0.79% to settle at $84.40 a barrel, though both reached their highest levels since July 24 during the session. The main reasons were the UAE's announcement of a suspension of all financial and economic ties with Iran, coupled with continued slow ship traffic in the Strait of Hormuz (only six cargo ships passed through on Tuesday, far below the daily average). US President Trump stated there are no plans for talks with Iran and insisted the Strait of Hormuz is open, but Iran maintains it is closed. Meanwhile, reports suggest Iran might target European military objectives if the conflict escalates. These factors have collectively pushed up risk premiums, with some analysts believing Brent crude could return to triple digits. Furthermore, disruptions at the Black Sea port of Novorossiysk led to a 15% reduction in exports from western Russian ports in the first half of August, further supporting supply concerns. Although US Energy Information Administration data showed an unexpected increase of 4.4 million barrels in crude oil inventories to 428.8 million barrels last week, and refinery utilization rates rose to 97.2%, the inventory data failed to offset the geopolitical impact.

Foreign exchange market

The dollar index fell nearly 1% on Wednesday to close at 98.77, a near three-month low, as the U.S. Treasury unexpectedly announced it would double the size of its long-term bond repurchase operations to support market liquidity. The yield on 30-year U.S. Treasury bonds fell sharply from its near 19-year high. A day before the U.S. Treasury unexpectedly announced an expansion of its long-term Treasury bond repurchase program, one or more investors made a large purchase of an ETF highly sensitive to fluctuations in U.S. long-term Treasury yields. The $1.5 billion PIMCO 25+ Year Zero-Coupon U.S. Treasury Index ETF attracted a record $123 million in inflow on Tuesday, with trading volume jumping to 5.2 million shares, nearly double the previous peak set in 2024. This ETF invests in so-called "stripped-down" Treasuries, zero-coupon securities created by separating the principal and interest payments from bonds, amplifying bets on long-term interest rate movements. Its bond holdings have an effective duration of approximately 28 years, meaning that for every 1 percentage point decrease in yield, the price will rise by about 28%. On Wednesday, the ETF rose 3.2%, its largest single-day gain since November 2024. Currently, the probability of the Federal Reserve raising interest rates in September is 32.7%, and the probability of at least one rate hike this year is 68.5%.

International News

Trump Announces "Toughest" Economic Sanctions Against Iran, Warns Other Countries Against Providing Support US President Donald Trump announced on social media that he would impose the most devastating economic sanctions ever imposed on any country against Iran. He stated that although the US had given Iran "the best opportunity to negotiate," Tehran failed to seize it, therefore the US would launch an unprecedented economic war and isolation blockade. In his statement, Trump claimed that Iran's navy no longer exists, its air force has been destroyed, its military factories are in ruins, its currency is "worthless," and its national economy is on the verge of collapse. He also warned that any country that allows its financial institutions, businesses, airports, or government agencies to provide any form of survival support to Iran will also face extremely serious economic consequences. Trump explicitly demanded that all activities supporting Iran, including oil smuggling, currency swaps, cash transfers, ship registration, and shell companies, must immediately cease. He called this action "Normandy in the economic sphere" and called on all allies to stand with the US to isolate and defeat the threat posed by Iran. The US Treasury has significantly increased its long-term bond repurchase operations, signaling its commitment to stability and easing supply pressures . The US Treasury Department announced that it will at least double the size of its liquidity support repurchase operations for long-term nominal coupon securities. This expansion covers two maturity ranges: 10-20 years and 20-30 years. The maximum amount for a single operation has been increased from $2 billion to at least $4 billion. The adjustment will take effect on September 9th and continue until the end of the current refinancing quarter. This expansion reflects the Treasury's focus on liquidity in the long-term Treasury market. Recent increases in corporate bond issuance coupled with a widening federal fiscal deficit have led to a continuous accumulation of supply pressure on long-term Treasury bonds, resulting in a rise in term premiums. By increasing repurchase operations, the Treasury is signaling its policy concern for stabilizing long-term bond yields. The timing of this adjustment comes at a time when the market is divided on the monetary policy stance of the new Federal Reserve Chairman, and long-term bond yields have climbed to multi-year highs in recent months. While the Treasury's increased repurchase operations do not directly equate to yield intervention, they help smooth the supply-demand imbalance in the secondary market and provide dealers with more liquidity outlets. The focus now shifts to whether a longer-term repurchase framework will be announced at the November refinancing meeting. A further expansion of the repurchase scale or maturity range could have a more profound impact on long-term interest rate pricing. Currently, the operation is positioned as a liquidity support tool, not a return to quantitative easing. Report: US Launches Operation to Transport Oil Through the Strait of Hormuz Two US officials revealed to Axios that the US military has quietly established a shipping channel in and out of the Strait of Hormuz, capable of transporting millions of barrels of oil daily. Despite the ongoing stalemate in the widespread conflict, the operation has yielded significant results. The operation has been underway for several weeks, with 15-20 oil tankers traveling along the southern route off the coast of Oman through the strait. Officials stated that approximately 10 million barrels of oil are transported daily through the strait into the global energy market, roughly half the pre-war volume. Officials said the operation was made possible by a recent two-week military operation by US Central Command that weakened Iran's radar and maritime surveillance systems. Federal Reserve Meeting Minutes: July Meeting Signals Hawkish Sentiments The minutes of the Federal Reserve's July meeting show that most Fed officials supported keeping interest rates unchanged, but several officials favored a 25 basis point rate hike. Many participants indicated that further rate hikes might be necessary if inflation does not continue to decline. Some officials stated that an immediate rate hike would help avoid larger subsequent rate increases. Some Fed officials believed that the current tightening of financial conditions was insufficient to bring inflation back to the 2% target. Several members noted that price increases in goods and services had spread across the board. The inflation outlook remained largely unchanged from June, while the economic outlook assessment was slightly weaker. Almost all members supported upholding the Federal Open Market Committee's commitment to "achieving price stability." Fed officials pointed out that strong economic growth, coupled with market expectations of further Fed tightening, had already tightened financial conditions. The Fed also discussed reducing its annual policy meetings to six to allow more time to accumulate economic data, but no decision was made. The US plans to halve tariffs on Canadian steel and aluminum. According to sources, a tentative trade agreement between the US and Canada proposes to reduce tariffs on some Canadian steel and aluminum exports to 25%. Details are yet to be finalized, and a blanket reduction is not expected. Some derivatives containing these metals may be subject to different tariff rates. The US had planned to impose 50% tariffs on billions of dollars worth of Canadian goods, but President Trump postponed the implementation to allow more time for negotiations. Less than 24 hours later, US and Canadian trade advisors continued consultations on Wednesday. This metal tariff adjustment plan is expected to lead to a long-term agreement, avoiding widespread tariff increases before Friday's deadline. Trump has a history of demanding last-minute changes to trade agreements, and even outright rejection of agreements. Trump: Negotiations with Iran may take place at some point. On August 19, local time, US President Trump stated regarding the Iran issue that negotiations might take place at some point. On August 18, Trump stated on social media that there would be no talks or dialogues with Iran at present or in the future. Previously, Trump had insisted that the US was negotiating with Iran, but this had been repeatedly denied by Iranian officials. Iranian Military Official: Iran's Strategy Against Enemies May Shift from Defense to Offense In an interview video released on August 19, Mohammad Reza Naghdi, advisor to the commander-in-chief of the Iranian Islamic Revolutionary Guard Corps, stated that the war shows the US and Israel are "far weaker" than imagined. Naghdi claimed that Iran's previous adherence to a defensive strategy emboldened its enemies to launch repeated attacks; perhaps Iran should adopt an offensive strategy to achieve a higher level of deterrence against the US and Israel, forcing them to retreat and depriving them of the courage to launch new attacks. (CCTV News) The probability of the Federal Reserve raising interest rates in September is 32.7%, and the probability of at least one rate hike this year is 68.5%. According to CME's "FedWatch": the probability of the Fed maintaining interest rates unchanged by September is 67.3%, and the probability of a cumulative 25 basis point rate hike is 32.7%. The probability of the Fed maintaining interest rates unchanged by October is 58.3%, the probability of a cumulative 25 basis point rate hike is 37.3%, and the probability of a cumulative 50 basis point rate hike is 4.3%. The probability of the Federal Reserve keeping interest rates unchanged until December is 31.5%, while the probability of raising rates by at least 25 basis points is 68.5%.

Domestic News

Shanghai's first multimodal transport shipment via sea-rail transit has been successfully completed, achieving "one container to the end." Recently, a batch of containers carrying export goods such as clothing and small appliances arrived at the Shanghai Luchao Port Railway Container Center Station from Guangzhou via railway train. They were then seamlessly connected to road transport and transferred to the Shanghai Waigaoqiao Port Terminal for direct loading onto ships for export. This marks the successful implementation of Shanghai Customs' first "sea-rail multimodal transport" customs supervision model. Unlike traditional sea-rail intermodal transport, the new model streamlines multiple declarations and segmented processing procedures. Shanghai Customs utilizes digital and intelligent supervision methods, establishing a secure intelligent lock-based in-transit supervision system, and connecting the data links between railway supervision stations, customs supervision platforms, and terminal operation platforms. It is reported that exporting companies only need to submit a multimodal transport application form once at the customs office at the port of departure to complete the entire online declaration process for the entire transport journey, and complete customs declaration and inspection procedures in one stop, achieving "release upon departure." The entire process requires no opening of containers and no repeated customs clearance procedures, achieving "zero delay and zero waiting time," realizing "one container to the end." (CCTV News) China Now Has a Second Reusable Launch Vehicle The Zhuque-3 Y2 rocket successfully completed its mission on the 19th. The Zhuque-3 Y2 launch vehicle is 66.1 meters tall and 4.5 meters in diameter. Its body is made of stainless steel, similar to the material used in insulated water bottles. The Zhuque-3 recovery process involved overcoming three hurdles: supersonic reentry, high-precision guidance, and a final "brake." In short, it required reducing the speed of a 15-story building during supersonic flight to zero in just over 300 seconds, allowing it to land smoothly and stably, ensuring it remains intact. Today, with the Zhuque-3 Y2 launch vehicle landing safely, the first stage of the rocket achieved China's first controlled land-based recovery, a momentous achievement. First, this marks the acquisition of China's second reusable launch vehicle; second, with increased reuse rates, its launch costs are expected to decrease by 70%; third, it provides a new option for satellite internet deployment—its future 20-ton payload capacity will allow it to send dozens of satellites into space at once. Imagine the future: when reusability becomes commonplace, you will see more and more Chinese launch vehicles returning from space. That day is not far off. (CCTV Finance)