Metals are rising! Gold and silver prices have just experienced a sharp uptick, touching their highest levels in three weeks. This positive shift comes on the back of a U.S. inflation report that came in slightly softer than anticipated.
August gold delivered an impressive performance, adding $24.60 to close at $1,961.70. Meanwhile, September silver wasn't far behind, gaining $1.014 to finish at a strong $24.295.
Now let's delve into some data - the June consumer price index (CPI) report indicated a year-on-year increase of 3.0%, a tad less than the forecasted rise of 3.1%. Even more significant, it's a substantial step down from May's report which showed a 4.0% increase. This is particularly favorable for us "monetary policy doves," who advocate for the Federal Reserve to maintain the current interest rate levels.
In the aftermath of this CPI release, the U.S. dollar index took a hit and descended sharply, which was our cue for a rally in stock indexes and a dip in U.S. Treasury yields. The U.S. dollar index even touched a two-month low, while Nymex crude oil prices increased to around $75.50 a barrel. The benchmark 10-year U.S. Treasury note yield is currently at 3.859%, well below the overnight levels.
Turning to the technicals, we saw August gold futures prices hitting a three-week high today. The momentum appears to be on the bulls' side, and the downtrend that's been with us for the last nine weeks on the daily bar chart has finally been reversed. The next milestone for the bulls is to achieve a close above the formidable resistance level at $2,000.00.
On the silver front, September futures prices mirrored the upward trend, touching a three-week high. It seems the silver bulls have finally gained a minor overall near-term technical advantage, and the nine-week-old price downtrend on the daily bar chart has been successfully countered.
In conclusion, it appears that the tables are turning in our favor. Let's keep a close eye on the market trends, and continue to make the most of these precious opportunities!