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What’s happening: Gold moved higher on Wednesday, recording gains for the fourth consecutive session.
What happened: Gold had been on a downward trajectory since mid-July, amid a sharp increase in US Treasury yields.
The yellow metal staged a reversal on Friday and has continued to climb so far this week, with support from weakness in the US dollar.
Why it matters: Rising US Treasury yields and a higher greenback had resulted in gold recording losses for nine straight sessions. The yellow metal rebounded on Friday and recorded gains for four consecutive sessions.
Weakness in the US dollar lent support to gold prices, as a lower greenback generally makes commodities and metals cheaper for foreign currency holders.
The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell more than 0.1% to 103.42 on Wednesday.
The yield on the US 10-year Treasury note also moved lower on Wednesday, following the release of PMI data. The S&P flash US manufacturing PMI fell to a two-month low of 47 in August, versus last month’s reading of 49. The figure also came in below market expectations of 49.3. Meanwhile, the US services PMI declined to a six-month low of 51 in August, from 52.3 in the prior month.
December gold jumped $22.10, or around 1.2%, to settle at $1,948.10 an ounce on Wednesday, marking its biggest single-session surge since the end of July. Silver for September delivery added 94 cents to $24.39 an ounce, while September copper gained 5 cents to $3.81 a pound.
What to watch: Markets will watch the gathering of central bankers for their annual meeting at the Jackson Hole Symposium this week. Investors will also monitor the movement in the US dollar and Treasury yields.
Context: Shares of Nvidia gained in after-hours trading on Wednesday, following better-than-expected quarterly results and a strong forecast.
Details: Nvidia’s shares breached the major $500 level in the extended trading session on Wednesday, after the company reported earnings well ahead of expectations amid AI momentum.
Nvidia’s second-quarter adjusted earnings rose sharply by 429% year-over-year to $2.70 per share, topping the consensus estimates of $1.91 per share. Its revenue also jumped 101% year-over-year to a record $13.51 billion, surpassing Wall Street expectations of $10.3 billion.
Its Data Center revenues climbed to a record high and represented around two-thirds of the company’s total revenues. The segment reported revenues of $10.32 billion, driven by the strong growth of its computing platform.
Revenues from Nvidia’s gaming segment climbed to $2.49 billion, topping market estimates of $2.4 billion.
Its non-GAAP gross margins widened to 71.2% from 45.9% in the same quarter last year and 66.8% in the previous quarter.
“A new computing era has begun. Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI,” CEO Jensen Huang said during the earnings call.
Nvidia’s board authorised an additional share repurchase of $25 billion, without expiration. Management guided to third-quarter revenues of $16 billion, plus or minus 2%, higher than market estimates of $11.57 billion.
Nvidia’s shares jumped 6.6% to $502.15 in after-hours trading, following the release of quarter results, after adding 3.2% during the regular trading session on Wednesday. The company’s share price has more than tripled this year.
What to watch: Investors will watch the demand for Nvidia’s high-end chips as companies around the world continue their AI investments.
Other Markets: European indices closed higher on Wednesday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 0.68%, 0.15%, 0.08% and 0.39%, respectively.
Yevgeny Prigozhin, the head of Russian mercenary group Wagner, was reportedly killed in a plane crash. The news sent the safe-haven US dollar index slightly lower this morning.
Ireland’s Credit Union Consumer Sentiment Index declined to 62.2 in August, from 64.5 in the prior month, exerting pressure on the EUR/USD forex pair.
The Bank of Korea maintained its base rate at 3.5% at its August meeting, which sent the KRW/USD pair higher in forex trading this morning.
Argentina’s economic activity estimator fell by 4.4% year-over-year in June. This being the third straight monthly contraction exerted pressure on the ARS/USD forex pair.
Canada’s retail sales rose by 0.4% in July, which sent the CAD/USD pair higher in forex trading this morning.
Saudi Arabia’s balance of trade, France’s manufacturing climate indicator and business climate indicator, Indonesia’s value of loans, Central Bank of Indonesia’s interest rate decision, UK’s CBI distributive trades, Turkey’s foreign exchange reserves and Central Bank of Turkey’s interest rate decision, Mexico’s Inflation Rate and monetary policy meeting minutes, Canada’s manufacturing sales, US durable goods orders, Chicago Fed national activity index, initial jobless claims, continuing jobless claims, natural gas stocks change, Kansas Fed composite index and Kansas City Fed’s manufacturing production index, as well as Argentina’s retail sales.
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