Daily Summary: CPI Data Pushes Gold Toward $2,400 Zone

Daily Summary: CPI Data Pushes Gold Toward $2,400 Zone
Daily Summary: CPI Data Pushes Gold Toward $2,400 Zone
  • Wall Street indices rose today, supported by the US CPI reading for April. The S&P 500 gains 1%, the Dow Jones adds 0.7%, while the Nasdaq jumps 1.2%.
  • The overall U.S. CPI slowed from 3.5% to 3.4% year-over-year in April (exp. 3.4% year-over-year), while the core measure fell from 3.8% to 3.6%. YoY (exp. 3.6% YoY). The overall monthly CPI surprised on the downside, rising to 0.3% month-on-month (exp. 0.4% month-on-month).
  • While the data is in line with expectations, this is the first 2024 CPI reading that does not show an upside surprise.
  • US retail sales data, released simultaneously with the CPI printing, were disappointing. Overall retail sales for April remained stable, despite an expected rise of 0.4% month-on-month. Sales excluding automobiles increased 0.2% month-on-month, in line with expectations.
  • A somewhat dovish CPI reading and disappointing retail sales data put pressure on the US dollar, while supporting precious metals, stocks and cryptocurrencies.
  • Gold is up more than 1% and trading near $2,390 an ounce, just below its all-time highs. Meanwhile, silver is climbing more than 3%, above $29.50 an ounce and on track for the highest daily close since the first quarter of 2013.
  • Bitcoin gains over 5% supported by a weaker US dollar. Ethereum and Dogecoin are trading more than 3% higher on the day.
  • A two-day rally in so-called meme stocks appears to have ended today. GameStop is falling more than 25% today, while AMC Entertainment is falling more than 20%.
  • European stock indices rose today – the German DAX gained 0.8%, the British FTSE 100 and the French CAC40 rose 0.2%, the Spanish IBEX jumped 1.1% and the FTSE Italian MIB added 0.6%.
  • ECB member Villeroy said the European Central Bank was very likely to start cutting rates at the June meeting.
  • The Fed’s Kashkari said Bitcoin had little practical use and was not an investment vehicle or currency.
  • The European Commission forecasts that inflation in the euro zone will slow to 2.5% in 2024 and 2.1% in 2025. GDP is expected to grow by 0.8% this year and by 1.4% in 2025.
  • The Atlanta Fed’s latest GDP estimate for Q2 is 3.8%, up from 4.2% previously.
  • Oil recovered some of its daily losses after the DOE report showed a larger-than-expected inventory decline of 2.51 million barrels (exp. -1.20 mb).
  • US business inventories decreased 0.1% month-on-month in March (exp. 0.0% month-on-month).
  • Annualized housing starts in Canada for April stood at 240.2 thousand (exp. 234 thousand), compared to 242.3 thousand reported for March.
  • The SEK fell after the Swedish inflation report showed a slowdown in CPI from 4.1% to 3.9% y-o-y in April (exp. 4.0% y-o-y). Core CPI was unchanged at 2.9% year-on-year, in line with market expectations.
  • The final report of the French CPI confirmed the slowdown of the overall measure from 2.3 to 2.2% year-on-year, as indicated by the preliminary publication.
  • The Eurozone GDP report showed an expansion of 0.3% quarter-on-quarter, in line with the preliminary reading. On an annual basis, the eurozone economy grew by 0.4% year-on-year.
  • Eurozone industrial production fell 1.0% year-on-year in March (exp. 1.3% year-on-year).

Gold climbs more than 1% and approaches the $2,400 resistance zone. The precious metal is trading within 2% of its all-time highs. Source: xStation5

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