USAGOLD/Peter Grant/07-14-17
Gold is rebounding following more disappointing U.S. data. The dollar is plumbing the recent lows as September rate hike expectations have deteriorated further.
Resistance defined by the 1229.37/63 zone is under pressure. If gold breaks through this first tier of resistance, focus would shift to the halfway back point of the decline from just in front of $1300.
U.S. CPI came in unchanged in June, below expectations of +0.1%. The annualized rate slowed to 1.6%, down from 1.9% in May. Core CPI was +0.1% in June, on expectations of +0.2%. Zerohedge reports that this was the fourth consecutive monthly miss on CPI with consumer inflation at the lowest level since January 2015.
Consumer Prices Disappoint For 4th Month In A Row – Weakest Since Jan 2015 https://t.co/a2d3oEgscw — zerohedge (@zerohedge) July 14, 2017
Consumer Prices Disappoint For 4th Month In A Row – Weakest Since Jan 2015 https://t.co/a2d3oEgscw
— zerohedge (@zerohedge) July 14, 2017
Adding insult to injury, June retail sales fell 0.2%, below expectations of +0.1%. Ex-auto also came in at -0.2%, on expectations of +0.2%. This is likely to result in further downgrades to Q2 GDP expectations.
The Fed may continue trying to convince us that this weakness is “transitory,” but markets are clearly starting to have their doubts. If the Fed is truly data dependent, I think a September rate hike is off the table. A hike in December will become increasingly dubious.
