The annual CPI inflation rate in the U.S. fell to 3.5% in June, year-on-year, the first decline in five months, compared to 4.2% in May and below forecasts of 3.8%. Energy costs increased 15.7%, below 23.5% in May, as the ceasefire between the US and Iran alleviated inflationary pressures from the energy component. Gasoline prices rose 26.7% (vs 40.5% in May) and fuel oil increased 42.9% (vs 58.9%). Meanwhile, annual core inflation (minus food and energy) eased to 2.6% from 2.9%, below forecasts of 2.8%. Compared to the previous month, core CPI steadied, compared to forecasts of a 0.2% rise. The U.S. dollar index sold off on the tamer CPI print. U.S. Treasury yields down-ticked a bit and the stock indexes gained.
Meantime, Fed Chair Kevin Warsh said policymakers remain fully committed to restoring price stability and have no tolerance for persistently elevated inflation, according to prepared remarks released ahead of his Semiannual Monetary Policy Report to Congress. Warsh added, "If we get policy right - and we will - the inflation surge of the last five years will be a thing of the past". The Fed Chair also said the U.S. economy continues to expand at a solid pace, demonstrating resilience despite recent developments. Household consumption is growing at a moderate rate, while manufacturing output has risen steadily this year. He highlighted business investment as the economy's most notable strength, driven largely by the construction of data centers and robust demand for AI-related equipment and software. On the labor market, Warsh noted that job creation has kept pace with labor force growth, the unemployment rate remains low while nominal wages continue to post solid growth. Warsh seemed to be trying to thread the needle on not being too hawkish or too dovish on U.S. monetary policy.
Technically, August gold futures prices are trending down on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the July high of $4,238.10. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the June low of $3,955.40. First resistance is seen at today’s high of $4,112.50 and then at $4,150.00. First support is seen at 4,000.00 and then at the June low of $3,955.40. Wyckoff's Market Rating: 2.5
September silver futures bulls see their next upside price objective is closing prices above solid technical resistance at $65.00. The next downside price objective for the bears is closing prices below solid support at $50.00. First resistance is seen at $61.195 and then at $63.73. Next support is seen at today’s low of $57.165 and then at the June low of $56.13. Wyckoff's Market Rating: 2.5
