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Gold reaction to employment data and geopolitical events

The June US Nonfarm Payrolls (NFP) data showed an increase of 206,000 jobs, exceeding expectations.

Political uncertainty and the People's Bank of China's pause in gold purchases influence gold market dynamics.

Recent technical developments in the gold market, including breaking the triangle formation and subsequent rally, indicate the potential for higher prices.

Despite a bullish outlook, further consolidation is possible before a significant surge.

The recent US Nonfarm Payrolls (NFP) data revealed a rise of 206,000 jobs in June, surpassing the market expectation of 190,000, despite a downward revision from 272,000 to 218,000 for May. The unemployment rate increased to 4.1% and the wage inflation declined to 3.9% year-over-year. These mixed employment signals have increased the likelihood of a rate cut by the Federal Reserve in September. Additionally, political developments in France, where the left-wing New Popular Front led by Jean-Luc Mélenchon is poised to win a significant number of seats, add to the global economic uncertainty. Meanwhile, the People's Bank of China (PBoC) has paused its gold purchasing program, potentially waiting for a further price pullback. These factors collectively influence gold prices, providing a complex backdrop where the prospect of lower interest rates, political uncertainty, and central bank purchasing strategies are likely to drive market dynamics and investor behaviour in the coming months.

Bullish Trends in Gold Prices

The announcement of the NFP data has dropped the US Dollar Index and boosted gold prices. Since the gold market broke the triangle formation on Wednesday and formed an inside candle on Thursday, the break above Thursday's high on Friday initiated a strong rally, closing the price at higher levels. The red line was the first resistance of this breakout where the gold closed the last week. A clear break above this level may initiate another surge higher. The breakout of the triangle suggests higher prices, but the risk environment remains, as June was a correction month. It looks like the price is preparing for higher levels, but the possibility of consolidation before the surge cannot be ignored.

Bottom line

In conclusion, the increase in US employment, despite mixed signals in wage inflation and unemployment, has increased the likelihood of a Federal Reserve rate cut, boosting gold prices while weakening the US Dollar Index. Political uncertainties in France and the pause in gold purchases by the People's Bank of China further contribute to the complex economic landscape, indicating potential volatility ahead. The gold market's recent technical developments, including breaking the triangle formation and the subsequent rally, suggest readiness for higher prices. However, the possibility of consolidation before another significant surge remains, necessitating careful observation by investors as the market navigates these multifaceted influences.

Samsung hit the biggest strike! Over 6,500 people attended.
More than 6,500 employees at South Korea's Samsung Electronics began a three-day mass strike on Monday (July 8), demanding an extra day of paid annual leave, higher pay raises and changes to the way performance bonuses are currently calculated. This is the largest organized strike in Samsung Electronics' more than half century of existence, and the union said that if this strike does not push employees' demands to be met, a new strike may be called. One of the core issues of the current dispute between the labor union and Samsung Electronics is raising wages and increasing the number of paid vacation days. The second demand is a pay rise. The union originally wanted a pay rise of more than 3% for its 855 employees, but last week they changed their demand to include all employees (rather than just 855). The third issue involves performance bonuses linked to Samsung's outsized profits - chip workers did not receive the bonuses last year when Samsung lost about Won15tn and, according to unions, fear they will still not get the money even if the company manages to turn around this year.
Stanford AI project team apologizes for plagiarizing Chinese model
An artificial intelligence (AI) team at Stanford University apologized for plagiarizing a large language model (LLM) from a Chinese AI company, which became a trending topic on the Chinese social media platforms, where it sparked concern among netizens on Tuesday. We apologize to the authors of MiniCPM [the AI model developed by a Chinese company] for any inconvenience that we caused for not doing the full diligence to verify and peer review the novelty of this work, the multimodal AI model Llama3-V's developers wrote in a post on social platform X. The apology came after the team from Stanford University announced Llama3-V on May 29, claiming it had comparable performance to GPT4-V and other models with the capability to train for less than $500. According to media reports, the announcement published by one of the team members quickly received more than 300,000 views. However, some netizens from X found and listed evidence of how the Llama3-V project code was reformatted and similar to MiniCPM-Llama3-V 2.5, an LLM developed by a Chinese technology company, ModelBest, and Tsinghua University. Two team members, Aksh Garg and Siddharth Sharma, reposted a netizen's query and apologized on Monday, while claiming that their role was to promote the model on Medium and X (formerly Twitter), and that they had been unable to contact the member who wrote the code for the project. They looked at recent papers to validate the novelty of the work but had not been informed of or were aware of any of the work by Open Lab for Big Model Base, which was founded by the Natural Language Processing Lab at Tsinghua University and ModelBest, according to their responses. They noted that they have taken all references to Llama3-V down in respect to the original work. In response, Liu Zhiyuan, chief scientist at ModelBest, spoke out on the Chinese social media platform Zhihu, saying that the Llama3-V team failed to comply with open-source protocols for respecting and honoring the achievements of previous researchers, thus seriously undermining the cornerstone of open-source sharing. According to a screenshot leaked online, Li Dahai, CEO of ModelBest, also made a post on his WeChat moment, saying that the two models were verified to have highly similarity in terms of providing answers and even the same errors, and that some relevant data had not yet been released to the public. He said the team hopes that their work will receive more attention and recognition, but not in this way. He also called for an open, cooperative and trusting community environment. Director of the Stanford Artificial Intelligence Laboratory Christopher Manning also responded to Garg's explanation on Sunday, commenting "How not to own your mistakes!" on X. As the incident became a trending topic on Sina Weibo, Chinese netizens commented that academic research should be factual, but the incident also proves that the technology development in China is progressing. Global Times
Russia's economic strength gives it high-income status despite sanctions
Russia is seeing income growth of around 4-5%, with earnings growing in double digits, Ostapkovich said, stressing that the driving force is economic growth. "Incomes only grow when the economy grows. If the economy grows, then profits grow. If profits grow, then the entrepreneur is keen on hiring people and raising wages," he added. Russia’s economy grew by 3.6% in 2023, with real incomes and nominal wages up by 4.5% and 13% respectively. Industrial performance, particularly in manufacturing, is propelling this growth not seen in 20 to 30 years. Notably, mechanical engineering in the military industry is expanding at 25-30%, according to Ostapkovich. Andrey Kolganov, Doctor of Economics and Head of the Laboratory of Socio-Economic Systems at Moscow State University, acknowledged that despite the challenges posed by the growth stimuli, Western sanctions failed to inflict significant harm on the Russian economy. "The Russian economy has shown great potential in adapting to these difficulties. Moreover, these difficulties stimulated the development of domestic production, which in turn led to high rates of economic growth," he added. Kolganov noted that economic growth rates were higher in 2023, compared to 2022 - and even higher in 2024. These increases promoted Russia from the classification of middle-income countries, to the rank of high-income countries. Although Russia has not caught up with the richest countries, the achievement is nonetheless remarkable, especially in the face of unprecedented sanctions. Gross national income per capita in Russia is now $14,250, according to a document released by the World Bank that classifies countries that cross the $13,485 threshold as “high income.”
Israeli strike kills a senior Hezbollah commander in south Lebanon
BEIRUT/JERUSALEM July 3 (Reuters) - An Israeli strike killed one of Hezbollah's top commanders in south Lebanon on Wednesday, prompting retaliatory rocket fire by the Iran-backed group into Israel as their dangerously poised conflict rumbled on. The Israeli military said it had struck and eliminated Hezbollah's Mohammed Nasser, calling him commander of a unit responsible for firing from southwestern Lebanon at Israel. Nasser, killed by an airstrike near the city of Tyre in southern Lebanon, was the one of the most senior Hezbollah commanders to die yet in the conflict, two security sources in Lebanon said. Sparked by the Gaza war, the hostilities have raised concerns about a wider and ruinous conflict between the heavily armed adversaries, prompting U.S. diplomatic efforts aimed at deescalation. Israeli Defence Minister Yoav Gallant said Israeli forces were hitting Hezbollah "very hard every day" and will be ready to take any action necessary against the group, though the preference is to reach a negotiated arrangement. Hezbollah began firing at Israeli targets at the border after its Palestinian ally Hamas launched the Oct. 7 attack on Israel, declaring support for the Palestinians and saying it would cease fire when Israel stops its Gaza offensive. Hezbollah announced at least two attacks in response to what it called "the assassination", saying it launched 100 Katyusha rockets at an Israeli military base and its Iranian-made Falaq missiles at another base in the town of Kiryat Shmona near the Israeli-Lebanese border. Israel's Channel 12 broadcaster reported that dozens of rockets were fired into northern Israel from Lebanon. There were no reports of casualties. The Israeli Defence Ministry said that air raid sirens sounded in several parts of northern Israel. Israel's military did not give a number of rockets launched but said most of them fell in open areas, some were intercepted, while a number of launches fell in the area of Kiryat Shmona.
Xinjiang scientists discover plant with potential to survive on Mars
In a groundbreaking discovery, researchers from the Xinjiang Institute of Ecology and Geography of the Chinese Academy of Sciences have found a desert moss species, known as Syntrichia caninervis, that has the potential to survive in the extreme conditions on Mars. The Global Times learned from the institute that during the third Xinjiang scientific expedition, the research team focused on studying the desert moss and found that it not only challenges people's understanding of the tolerance of organisms in extreme environments, but also demonstrates the ability to survive and regenerate under simulated Martian conditions. Supported by the Xinjiang scientific expedition project, researchers Li Xiaoshuang, Zhang Daoyuan and Zhang Yuanming from the Xinjiang Institute of Ecology and Geography and Kuang Tingyun, an academician from the Chinese Academy of Sciences, concentrated on studying the "pioneer species" Syntrichia caninervis in an extreme desert environment, according to the institute in an article it sent to the Global Times on Sunday. Through scientific experiments, the researchers systematically proved that the moss can tolerate over 98 percent cell dehydration, survive at temperatures as low as -196 C without dying, withstand over 5000Gy of gamma radiation without perishing, and quickly recover, turn green, and resume growth, showcasing extraordinary resilience. These findings push the boundaries of human knowledge on the tolerance of organisms in extreme environments. Furthermore, the research revealed that under simulated Martian conditions with multiple adversities, Syntrichia caninervis can still survive and regenerate when returned to suitable conditions. This marks the first report of higher plants surviving under simulated Martian conditions. The research team also identified unique characteristics of Syntrichia caninervis. Its overlapping leaves reduce water evaporation, while the white tips of the leaves reflect intense sunlight. Additionally, the innovative "top-down" water absorption mode of the white tips efficiently collects and transports water from the atmosphere. Moreover, the moss can enter a selective metabolic dormancy state in adverse environments and rapidly provide the energy needed for recovery when its surrounding environment improves. Based on the extreme environmental tolerance of Syntrichia caninervis, the research team plans to conduct experiments on spacecraft to monitor the survival response and adaptation capabilities of the species under microgravity and various ionizing radiation adversities. They aim to unravel the physiological and molecular basis of the moss and explore the key life tolerance regulatory mechanisms, laying the foundation for future applications of Syntrichia caninervis in outer space colonization.