Support
CPI damps dovish expectations; Eyes on retail sales
Positive equity market sentiment reduced demand for gold despite Middle East tensions
WTI oil prices declined further as supply concerns eased
U.S. retail sales data today will be crucial for Fed policy and economic outlook
U.S. Treasury yields rose modestly
Following the release of the U.S. Consumer Price Index, market dynamics shifted as expectations for a substantial 50 basis point rate cut by the Federal Reserve in September began to fade. This led to a modest uptick in U.S. Treasury yields, which in turn tempered aggressive bullish positions on gold. The positive sentiment in equity markets further dampened demand for the safe-haven metal. However, with key U.S. economic data on the horizon, there remains potential for renewed gains in gold as traders closely monitor upcoming developments.
Gold Market
Despite ongoing geopolitical tensions in the Middle East and growing speculation that the Fed might soon begin cutting rates, these factors did little to prevent the metal's decline. However, today, gold regained some traction, supported by the soft U.S. Dollar and the persistent geopolitical risks.
Oil Market
West Texas Intermediate oil prices continued their downward trend, marking a third consecutive session of losses, with prices hovering around $75.90 during Thursday’s Asian session. The decline in crude oil prices comes amid easing concerns over supply disruptions due to geopolitical tensions in the Middle East.
Market Outlook
Today markets are waiting U.S. retail sales data. The retail sales figures for July are particularly important for the Federal Reserve as they look for indicators of economic direction in the latter half of the year. Previous months have shown a slowdown, with growth barely above 0.0%, sparking concerns about a cooling economy. However, today’s report is anticipated to show a slight recovery, with retail sales expected to rise by 0.3% month-over-month.
Key Data Releases Today:
- 1:30 PM BST: U.S. Retail Sales Data for July
- 1:30 PM BST: NY Empire State Manufacturing Index for August
- 1:30 PM BST: U.S. Employment Data (Jobless Claims)
- 2:15 PM BST: U.S. Manufacturing and Industrial Production for July
- 6:10 PM BST: Speech by FOMC Member Harker
These reports could significantly impact market movements, particularly as investors seek clues about the Fed’s next steps and the overall health of the U.S. economy.
