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Prevailing risk-on sentiment
Markets anticipate the Fed will begin rate cuts in September, keeping US Treasury bond yields at multi-month lows.
China's economy grew by 4.7% year-on-year in the second quarter, down from 5.3% growth in the first quarter
Upcoming US Industrial Production data
Gold prices faced resistance after reaching a peak of $2,482
Gold Market
Gold prices encountered resistance in their bid to maintain an intraday climb to a new all-time high, eventually settling near the lower bounds of the daily trading range. This adjustment came after the price touched a peak around the $2,482 mark during Asian trading hours on Wednesday. A prevailing risk-on sentiment, evident from the continued rise in global equity markets, has induced some profit-taking.
Despite this pullback, there is no major fundamental catalyst driving the downturn, and expectations of a dovish stance from the Federal Reserve (Fed) are likely to offer support.
Markets are confident that the Fed will commence rate cuts in September, keeping US Treasury bond yields at multi-month lows. This scenario prevents the US Dollar from staging a significant recovery from its recent three-month low, thus favoring gold, with attention now turning to upcoming US Industrial Production data for near-term direction.
Silver Market
Silver prices struggled to sustain the momentum from the previous day's gains, fluctuating between modest gains and losses during the Asian session on Wednesday. Virtually unchanged for the day and just below a new weekly high reached earlier.
Oil Market
West Texas Intermediate (WTI), the benchmark for US crude oil, is trading around $79.50 as of Wednesday. Concerns about a sluggish Chinese economy are exerting downward pressure on oil prices. Data released on Tuesday indicated weaker economic performance in China, the world’s largest crude oil importer, contributing to the sell-off.
China
China's economy grew by 4.7% year-on-year in the second quarter, a slowdown from the 5.3% growth in the first quarter, as reported by the National Bureau of Statistics (NBS) on Monday. Additionally, China’s retail sales growth in June was weaker than anticipated, rising only 2.0% year-on-year compared to the expected 3.1% and the previous month’s 3.7%.
US crude oil inventories also showed a notable decline, with stocks falling by 4.44 million barrels for the week ending July 12, compared to a 1.9 million barrel decline the previous week, as per the American Petroleum Institute (API). This was well beyond the anticipated draw of 33,000 barrels.
