1. U.S. stocks were mixed on Monday, as Wall Street braced for a week full of key economic data signals. Wall Street is coming off a whipsaw week that has left markets jumpy and “on edge.” Though the major indexes practically ended last week where they had started, it didn’t come without volatility throughout the week. Strategists say that is likely to continue, and this week comes with plenty of opportunities. Wednesday provides a fresh look at the state of inflation with the latest release of the Consumer Price Index. Then Thursday comes with two key signals on the state of the U.S. consumer: a reading on July’s retail sales and Walmart earnings. Wall Street once again sees good news as good news, so its volatility this week may depend on the signals those data introduce. By Friday stocks headed toward their best week this year as a handful of economic data did little to alter bets the Federal Reserve will kick off its rate cuts in September.
2. Gold and silver prices are higher in early U.S. trading Monday. The gold market continues to see some technical buying amid a bullish chart posture. Silver is being supported by some short covering in the futures market and some perceived bargain buying after recent selling pressure. December gold was last up $9.00 at $2,482.40. September silver was up $0.407 at $27.995. Technically, December gold bulls have the firm overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the contract high of $2,537.70. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $2,350.00. First resistance is seen at $2,490.00 and then at $2,500.00. September silver futures bears have the overall near-term technical advantage. Prices are in a 2.5-month-old downtrend on the daily bar chart. Silver bulls’ next upside price objective is closing prices above solid technical resistance at the August high of $39.355. The next downside price objective for the bears is closing prices below solid support at $26.00. First resistance is seen at $28.50 and then at $28.815.
3. U.S. producer prices increased less than expected in July as an energy-driven rebound in the cost of goods was tempered by cheaper services, indicating that inflation continued to moderate in support of an interest rate cut next month. The benign report from the Labor Department on Tuesday also showed favorable readings for most of the components that go into the calculation of the inflation measures tracked by the Federal Reserve for monetary policy. “Producer price increases cooled this month, which is good news for the Fed’s inflation fight, but there is no PPI deflation, so Fed officials do not have to rush to judgment and bring rate cuts forward because the economy is headed downhill,” said Christopher Rupkey, chief economist at FWDBONDS. The producer price index for final demand edged up 0.1% last month after rising by an unrevised 0.2% in June, the Labor Department’s Bureau of Labor Statistics said. Economists polled had forecast the PPI gaining 0.2%. In the 12 months through July, the PPI increased 2.2% after climbing 2.7% in June.
4. Mortgage rates rose slightly from the previous week as investors continue to expect the Federal Reserve to cut interest rates next month. The average rate on the 30-year fixed-rate mortgage ticked up to 6.49% from 6.47% last week, Freddie Mac reported on Thursday, marking its lowest level in more than a year. A year ago, the average rate on a 30-year fixed-rate loan was 7.09%. Separately, the average rate for the 15-year fixed mortgage was 5.66%, up from 5.63% a week prior. The rate on a 15-year loan was 6.46% a year ago. “While rates increased slightly this week, they remain more than half a percent lower than the same time last year,” Sam Khater, Freddie Mac’s chief economist, wrote. “In 2023, the 30-year fixed-rate mortgage nearly hit 8 percent, slamming the brakes on the housing market. Now, the 30-year fixed-rate hovers around 6.5 percent and will likely trend down in the coming months as inflation continues to slow. Lower rates are good news for potential buyers and sellers alike.”
5. Consumer sentiment rebounded in August for the first time in five months. The latest University of Michigan consumer sentiment survey released Friday showed that sentiment ticked higher in August. The index reading for the month came in at 67.8, up from 66.4 in July and above the 66.9 economists had expected. It was the highest reading of consumer sentiment since June. The reading on consumer sentiment comes amid a volatile two weeks for the stock market and the overall narrative surrounding the economy. A weaker-than-expected July jobs report fueled concerns about how rapidly the US labor market is cooling, helping spark a market sell-off.
6. The number of Americans filing new applications for unemployment benefits unexpectedly fell last week, suggesting an orderly labor market slowdown remained in place, though laid-off workers are finding it a bit difficult to land new jobs. Initial claims for state unemployment benefits dropped 7,000 to a seasonally adjusted 227,000 for the week ended Aug. 10, the Labor Department said on Thursday. Economists polled had forecast 235,000 claims for the latest week.
7. Oil tumbled at the end of a turbulent week, with traders continuing to weigh the impact of a slowdown in China against a possible attack by Iran or proxies on Israel. U.S. crude oil futures fell 3% on Friday amid reports that Qatar told Iran to not attack Israel while Gaza cease-fire talks are ongoing. West Texas Intermediate September contract: $76.13 per barrel, down $2.02, or 2.58%. Year to date, U.S. crude oil has gained 6.2%. Brent September contract: $79.15 per barrel, down $1.91, or 2.36%. Year to date, the global benchmark is ahead 2.7%.
8. The EUR/USD pair rebound near the psychological resistance of 1.1000 in Friday’s New York session. The major currency pair bounces back as the U.S. Dollar declines with investors gaining confidence that the Federal Reserve will start reducing interest rates from the September meeting.
9. USD/JPY eased lower on Friday, slipping below 149.00 early in the day and testing near the 148.00 handle. The Dollar is selling off across the board as broad-market sentiment recovers on the back of an upturn in US consumer sentiment figures.
Gold edged up to near a record, as investors awaited key inflation data that could prompt the Federal Reserve to cut interest rates next month. Bullion reached as high as $2,478.61 an ounce – within roughly $5 of its record set last month – with traders looking to the Consumer Price Index data later Wednesday for more clues on the Fed’s rate path. Lower rates are traditionally seen as bullish for non-interest-bearing gold. Beyond the inflation figures, there are strong tailwinds for gold, which “continues to be supported amid the ongoing geopolitical uncertainties and expectations of interest-rate cuts from the US Fed,” said Ewa Manthey, a commodities strategist at ING Bank. Gold is up about 20% this year amid mounting optimism on monetary easing and large purchases by central banks. It’s also seen support from increased haven demand from geopolitical risks, including tensions in the Middle East and Russia’s conflict with Ukraine.
A closely watched report on U.S. inflation showed that consumer price increases came in line with estimates during the month of July, according to the latest data from the Bureau of Labor Statistics released Wednesday morning. The Consumer Price Index (CPI) rose 0.2% over the previous month, an uptick from June’s 0.1% decline, amid a pickup in energy prices. The monthly increase in prices was in line with economists’ expectations. The index increased 2.9% over the prior year in July, which was a slight deceleration compared to June’s 3% annual gain in prices and ahead of expectations of a 3% annual increase. The break below 3% is the lowest annual reading since spring 2021. On a “core” basis, which strips out the more volatile costs of food and gas, prices in July climbed 0.2% over the prior month and 3.2% over last year — matching economist expectations. Core prices rose 0.1% month over month and 3.3% on an annual basis in June.
U.S. single-family homebuilding dropped to near a 1-1/2-year low in July due in part to Hurricane Beryl’s disruption of activity but rising new housing supply could limit a rebound. The fifth straight monthly decline in homebuilding reported by the Commerce Department on Friday suggested the housing market remained depressed at the start of the third quarter. Aside from the weather, the housing market remains constrained by higher mortgage rates and house prices. “Even though lower interest rates should provide ongoing support to new home sales, the existing oversupply in some regional markets could be a bigger constraint than we previously anticipated,” said Paul Ashworth, chief North America economist at Capital Economics. Single-family housing starts, which account for the bulk of homebuilding, tumbled 14.1% to a seasonally adjusted annual rate of 851,000 units last month, the lowest level since March 2023, the Commerce Department’s Census Bureau said.
Volatility should be expected to remain high as investors will be closely watching for hints on upcoming monetary policy direction. Many investors have redoubled their efforts to ensure that their portfolios are sufficiently diversified in the hopes that they will be able to withstand corrections in multiple market sectors. Many of these investors have included physical precious metals as part of their diversification plans, given their long history as a hedge against both inflation and during times of economic turmoil. Remember, the key to profitability through the ownership of physical precious metals is to own the physical product and hold it for the long term. Always remember that you should never overextend your ability to maintain ownership of your precious metals over the long run.
Trading Department – Precious Metals International Ltd.
Friday to Friday Close (New York Closing Prices)
| Aug. 9, 2024 | Aug. 16, 2024 | Net Change | ||
| Gold | $2,430.70 | $2,499.00 | 68.30 | 2.81% |
| Silver | $27.48 | $28.81 | 1.33 | 4.84% |
| Platinum | $923.60 | $955.15 | 31.55 | 3.42% |
| Palladium | $909.10 | $949.30 | 40.20 | 4.42% |
| Dow | 39497.93 | 40662.46 | 1164.53 | 2.95% |
Previous Year Comparisons
| Aug. 18, 2023 | Aug. 16, 2024 | Net Change | ||
| Gold | $1,889.05 | $2,499.00 | 609.95 | 32.29% |
| Silver | $22.72 | $28.81 | 6.09 | 26.80% |
| Platinum | $914.05 | $955.15 | 41.10 | 4.50% |
| Palladium | $1,258.32 | $949.30 | -309.02 | -24.56% |
| Dow | 34505.95 | 40662.46 | 6156.51 | 17.84% |
Here are your Short-Term Support and Resistance Levels for the upcoming week.
| Gold | Silver | |
| Support | 2377/2323/2283 | 26.37/25.30/24.15 |
| Resistance | 2512/2565/2590 | 29.74/30.81/31.10 |
| Platinum | Palladium | |
| Support | 900/878/847 | 846/787/742 |
| Resistance | 983/1005/1030 | 950/995/1054 |