Today US CPI report weakened US Dollar and supported gold as US interest expectations showed higher confidence in September and November cuts, suggesting even 25% chance of 3 cuts this year. As for now, gold futures gains almost 1.9%, rising to the highest level since 20 May. According to Mary Daly from the Fed, the US central bank still needs some time to weigh upcoming data to start cutting rates.
However, Daly signalled that the labour market is cooling and unemployment will rise, if the job market will continue to slowing down. US Super core CPI (non-housing services inflation) dropped by -0.154% on monthly basis, first time since 2021 (but is still higher to 4.6% on a yearly basis). Markets may now see higher chances that a further drop in inflation will end in the recession, as June services ISM data and NFP report were quite weak. In the effect we can see higher volumes and rally on gold market today.
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- It's a fairly big signal from the Fed that so many of us are talking about the labor market.
- We need more information before we can fully take the next step.
- Shelter prices are coming down, but the lack of supply means the process is slower than it has been in history.
- The decline in super-core ex-housing inflation is welcome.
- We are at the point where additional labour market slowing is more likely to result in a rise in unemployment.
- The labour market has softened but is still solid.
- It is likely some policy adjustments will be warranted.
- Recent inflation prints are a relief, but progress is bumpy.
- My expectation is that inflation will come down gradually, the labour market is gradually slowing.
- The economy looks to be on a path where 1 or 2 rate cuts this year would be more or less the appropriate path.
GOLD (D1 interval)
Source: xStation5
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