Article by: ETO Markets
Australian annual inflation rate for goods was 3.1% in this quarter. Since the September 2022 quarter, when annual inflation for goods peaked at 9.6%, there has been a six-quarter run of decreasing annual inflation. The March 2024 quarter saw a decrease in annual inflation for the majority of items. However, some goods, including furniture, appliances, footwear, and meat and seafood products, experienced deflation, or lower prices than they did a year previously. For the third quarter in a row, annual services inflation decreased to 4.3%, from a high of 6.3% in the quarter ending in June 2023.
Japanese yen is still weaker than the US dollar and is trading close to a multi-decade low. There is a significant difference between the Bank of Japan's cautious attitude to continued policy normalization and predictions that the Federal Reserve will hold off on interest rate cuts due to persistent inflation. This turns out to be a major element undermining the safe-haven JPY together with an overall bullish risk tone supported by lessening geopolitical tensions in the Middle East.
Treasury yields in the US are still steady. To prevent a decline in the future, they must maintain above their current support and receive a significant follow-through climb. German yields have gradually increased. The range breakout continues to hold. As long as this is true, there could be more rise. The five- and ten-year yields have dropped. Even if there is still potential for decline, the overall trend is upward. Supports are in place to prevent further declines and raise rates once more.
A large supply shortfall of silver combined with growing demand for the metal due to its industrial applications in semiconductors, photovoltaics, and electric vehicle charging could temporarily support the price of the metal. According to the Silver Institute, continuous structural gains from applications in the green economy allowed the industrial demand for silver to reach a record of 654.4 million ounces in 2023.
There is a sense of caution since the US economy's resiliency and the Federal Reserve's interest rate outlook may be further illuminated by the upcoming quarterly GDP and PCE inflation prints. Amid global concerns about inflation and a risk-averse mindset, the price of gold is making a feeble comeback. Even so, any attempts to move higher are probably going to be restricted before to the important US data flow.
Although the price of gold showed some tenacity below $… earlier this week, it now appears to have found acceptance below the 23.6% Fibonacci retracement level of the run from February to April. The continuing decline may push the XAU/USD down to the $…–… region, or the 38.2% Fibonacci level, on its way to the $… intermediate support level.
On the flip side, if the gold price continues to rise, it may be able to test the next significant barrier, which is located in the $…–$… range, and move much higher toward the $… supply zone.
The Middle East's oil supply, which has not been impeded by regional conflict, and the perceived de-escalation between Iran and Israel have pulled WTI prices lower in recent sessions. Nonetheless, any indication of escalating Middle East tensions and more stringent sanctions against Iran could limit the WTI price's decline.
WTI is still hung up on the 200-HMA around $…, which is impeding the near-term momentum for a topside move as barrel bids are still searching for positive bounces from the $… area. Although intraday barrel bidding is still well below recent highs around $…, more bearish momentum will need to breach below $… in order to continue declining.
