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Weekly News Recap 3 – 7 June 2024
News for 3 June 2024
Gold Rebound Limited, Facing Resistance
At the end of last week, gold prices weakened, closing at $2,327/oz. The reason was technical, as gold prices hit the key resistance level of $2,350/oz and could not break through, causing them to weaken.
On June 3rd at 8:45 PM, the US Manufacturing PMI is expected to be announced, with a forecast of 50.9.
News for 4 June 2024
Gold Fluctuates Near Resistance, Awaiting Direction
On June 3rd, gold prices rose, closing at $2,350/oz. This was due to the US Manufacturing PMI contracting more than expected to 48.7, along with the US dollar index weakening from 104.62 to 104.04. The weaker dollar supported the rise in gold prices.
On June 4th at 9:00 PM, the US Job Openings report is expected to be announced, with a forecast of 8.37 million.
NVIDIA’s Unstoppable Growth – Announcing AI Chip Platform for 2026
Jensen Huang, CEO of NVIDIA, revealed plans to develop an AI chip platform named Rubin, expected to hit the market in 2026. The Rubin family of chips will include new GPUs and a new CPU called Versa. NVIDIA currently dominates approximately 80% of the AI chip market, positioning itself as both a major opportunity creator and beneficiary of the booming AI industry.
Details of Rubin are as follows:
- The Rubin GPU will feature a 4x reticle design and TSMC’s CoWoS-L Packaging technology, along with the N3 process, as reported by Wccftech.
- The Rubin GPU will include the Vera CPU architecture, NVLink v6 switch, CX9 SuperNIC, and 8 HBM4 memory modules, while the Rubin Ultra GPU will have 12 HBM4 modules.
- Currently, NVIDIA uses the fastest HBM3e in its B100 GPU and plans to upgrade to HBM4 once HBM4 solutions are mass-produced by late 2025.
NVIDIA’s growth prospects have led Bank of America analysts to raise their target price to $1,500. Similarly, TipRanks compiled opinions from analysts, raising the average target price to $1,200. Out of 40 analysts, 37 recommend buying, while only 3 suggest holding.
OPEC+ Extends Oil Production Cuts Until 2025
On June 3rd, OPEC+ members agreed to extend the reduction of oil production by 3.66 million barrels per day until the end of 2025, instead of the original end date of 2024. Additionally, the cut in crude oil production by 2.2 million barrels per day has been extended by another three months, until the end of Q3 2024.
After that, OPEC+ will gradually begin to phase out the 2.2 million barrels per day production cut over a year, from October 2024 to September 2025.
According to Reuters, OPEC+ has adjusted its production cuts several times since late 2022. Currently, the group is reducing production by a total of 5.86 million barrels per day, which is approximately 5.7% of global demand.
News for 5 June 2024
Gold Fails to Break Above Resistance, Risk of Weakening
On June 4th, gold prices weakened, closing at $2,327/oz. The decline was due to the technical inability of gold to break above the key resistance level at $2,350/oz, coupled with the dollar index rising to 104.14. A stronger dollar exerted pressure on gold prices.
On June 5th, at 7:15 PM, the US private sector employment numbers are scheduled to be released, with a forecast of 173k. Later, at 9:00 PM, the US Services PMI is expected to be announced, with a forecast of 51.0.
China’s Technology Industry Begins to Recover – Which Chinese Stocks Are Benefiting?
According to the Ministry of Industry and Information Technology of China, in the first four months of this year, the total revenue increased by 12% YoY to 3.8 trillion yuan. This includes a 13% YoY increase in information technology services revenue, reaching 2.5 trillion yuan, which accounts for 65.9% of the total industry revenue. Additionally, the total revenue from cloud computing and big data services rose by 14% YoY to 410.7 billion yuan, while revenue from software products and information security increased by 9% YoY each.
Chinese Stocks Likely to Benefit (Forecast: Next Quarter)Chinese Stocks Likely to Benefit (Forecast: Next Quarter)
- Alibaba: A conglomerate involved in e-commerce, retail, internet, AI, and technology. ***Expected Performance: Revenue up YoY and QoQ, profit down YoY but up QoQ.
- Tencent: Primarily provides computer and network services for enterprises, and continuously expands businesses like WeChat and the game RoV. ***Expected Performance: Revenue and profit are up YoY and QoQ.
- Baidu: The leading search engine in China, similar to Google. ***Expected Performance: Revenue up YoY and QoQ, profit down YoY but up QoQ.
- Xiaomi: Produces and invests in electronics such as smartphones, mobile apps, and laptops. ***Expected Performance: Revenue up YoY and QoQ, profit stable YoY but down QoQ.
- Ping An Insurance: Drives the future of the financial business with technologies like cognitive recognition, AI, blockchain, and cloud computing.
WGC Reports Central Bank Gold Purchases Surge in April Despite High Prices
The World Gold Council (WGC) reported that net gold purchases by central banks worldwide rose significantly to 33 metric tons in April, a substantial increase from March’s net purchases of just 3 tons. This data indicates that gold remains highly sought after by central banks globally, even with high prices.
The demand for gold by central banks has surged rapidly over the past two years as they aim to diversify their foreign exchange reserves. A recent survey indicates that central banks plan to continue purchasing gold to strengthen their reserves.
According to WGC data, the central banks of Turkey, China, India, and Kazakhstan have been the largest net buyers of gold since the beginning of 2024.
News for 6 June 2024
Gold Rebounds Strongly Above Resistance as US Non-Farm Payrolls Signal Slowdown
On June 5th, gold prices rose, closing at $2,355/oz, successfully breaking above a key resistance level. This increase was driven by weaker-than-expected US Non-Farm Payrolls numbers, which came in at 152k, below forecasts, prompting a rush towards safe-haven assets.
On June 6th, at 7:15 PM, the European Central Bank (ECB) will hold a meeting, with market expectations suggesting an interest rate cut to 4.25%. Following this, at 7:30 PM, the US weekly jobless claims will be announced.
NVIDIA Surpasses Apple to Become World’s Second-Highest Market Cap
On June 5th, NVIDIA (NVDA) stocks surged, closing at $1,224, a 5.2% increase, resulting in a market cap of $3 trillion. This propelled NVIDIA to the second position in terms of the highest company market cap globally, surpassing Apple, which has a market cap of $2.99 trillion, now ranking third.
Investors are increasingly confident in the immense growth potential of NVIDIA’s sales, along with several cloud companies. In the latest quarter, revenue from NVIDIA’s business and data centers, including GPU sales, surged by 427% compared to the previous year, totaling $22.6 billion, accounting for approximately 86% of the company’s total revenue.
News for 7 June 2024
Gold Awaits Non-Farm Payrolls Tonight
On June 6th, gold prices rose, closing at $2,376/oz. This increase was attributed to the higher-than-expected US weekly jobless claims, which came in at 229k, along with a weakening dollar index, which closed at 104.09, supporting the rise in gold prices.
On June 7th, at 7:30 PM, the announcement of the US non-farm payrolls and unemployment rate is expected, with forecasts of 182k new jobs added and an unemployment rate of 3.9%, respectively.
TSMC Expands Simultaneously – Unaffected by US Import Taxes
Vanguard International Semiconductor Corporation (VIS), supported by TSMC and NXP Semiconductors, a Dutch chip design and manufacturing company, is preparing to establish a wafer manufacturing facility in Singapore.
NXP will invest $1.6 billion in this facility, while Vanguard plans to invest $2.4 billion. Additionally, the company is seeking additional funding of $1.9 billion to support the long-term production capacity of the facility. According to CNBC, this new facility could potentially create around 1,500 jobs in Singapore. Construction is expected to begin in the second half of 2023, with wafer deliveries to customers expected in 2030.
ECB Keeps Its Appointment, Cuts Interest Rates by 0.25%
The European Central Bank (ECB) announced a “policy interest rate cut” by 0.25% to 3.75% in yesterday’s monetary policy committee meeting, as anticipated. This marks the first interest rate cut in nearly five years, or since September 2022, and is also the first time in history that the ECB has acted before the Fed.
However, inflation rates in the eurozone have gradually declined from over 10% at the end of 2025 to slightly above the 2% target level at present. This significant factor has prompted the ECB to reassess its policies and lead to this interest rate cut.
While several central banks in various countries have already announced interest rate cuts, such as Sweden in May and Canada just announced on June 6th.
Analysts Expect BOJ to Reduce Bond Purchases at This Month’s Meeting and Cut Interest Rates in July
Bloomberg reported the survey results regarding the BOJ, indicating that 54% of the 50 economists surveyed said that the BOJ might slow down the size of its bond purchases, currently around 6 trillion yen per month, at the upcoming monetary policy meeting on June 14.
As for the timing of the next interest rate hike by the BOJ, one-third of the economists surveyed predict that the rate hike will occur in July, compared to the previous survey in April, which showed that only 19% of economists expected the rate hike to occur in July.
