Gold and Metals Turn Negative Amid Inflation Data and Risk Appetite

Currently, gold is trading 0.35% negative on the day at 1,413. Technical indicators are mixed with moving averages aligned to the upside but RSI and momentum showing some retracement expected.
Mauricio Carrillo
Gold and Metals Turn Negative Amid Inflation Data and Risk Appetite
Gold and Metals Turn Negative Amid Inflation Data and Risk Appetite

Gold and other metals such as silver, copper, palladium, and platinum are trading down on the day. Metals attempted a positive break, but they failed.

Risk appetite is the theme of the day as investors welcomed Fed’s Powell remarks on rate cuts in the next FOMC meeting. Inflation data also came above expectations in the United States, adding some salt to the investing market.

US reports a higher than expected inflation in June

The United States reported a 2.1% yearly inflation in June, above the 2.0% expected by market and registered in May.

Prices ex-food and energy rose 0.3% between May and June, above 0.2% expected by market and 0.1% posted in May.

Powell signals cuts in FOMC July

Federal Reserve chairman Jerome Powell hinted that the FOMC would cut rates in its next meeting later in the month as “crosscurrents have emerged” and the Fed will act accordingly to sustain economic expansion.

Besides, St. Louis Fed President James Bullard said that I would support a 25-basis point cut, but not a half-point reduction, “I would argue for a 25-basis point cut at the next meeting.”

Bullard also told reporters on Wednesday. “I don’t like to prejudge the meeting too much, but if the meeting were today or tomorrow that is what I would be recommending.”

Gold fell below 1,420 again on US inflation data and yield treasuries

XAUUSD daily chart July 11

Earlier in the session, gold jumped above the 1,420 area to trade as high as 1,430 fueled mostly by stronger than expected inflation data and falling Treasury yields.

Dollar is also recovering ground from 96.84 intraday low and it is now trading near to the 97.00 area, adding pressure to gold.

However, the metal got a rejection at that level, and it fell below the 1,420 area again and extended declines to 1,410.

Currently, XAU/USD is trading 0.35% negative on the day at 1,413. Technical indicators are mixed with moving averages aligned to the upside but RSI and momentum showing some retracement expected.

To the downside, gold will find support at 1,385 and then 1,345. To the upside, the unit should confirm levels above 1.420 and then test the 1,440 area.

Silver down after three positive days

Silver stopped its three-day recovery at 15.30 as the unit wasn’t able to sustain gains amid Powell remarks and inflation data. XAG/USD is now trading at 15.20, 0.20% negative on the day.

Metals report for July 11, 2019

Copper is consolidating highs on Thursday following the rally performed on Wednesday that took the mineral from 2.6224 to 2.6965. Today, XCU/USD found resistance at the 50-day moving average level at 2.6935, which is containing the upside. Copper is now trading 0.30% negative on the day at 2.6774.

Palladium is posting losses on the day as the unit jumped to test the 1,600 level, the highest level since March 2019, but it wasn’t able to sustain gains, and it is now trading back a,570, 1.55% down on the day. XPD/USD is returning to the previous range between 1,540 and 1,575.

Platinum is also trading down on Thursday as the unit attempted a break out above the 200-day moving average at 830.50. The unit jumped to highs since July 5 at 833.05, but it fails to sustain gains with the uni getting back to 826,25, 0.10% negative on the day.

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