Commodities Week Ahead: Taut Nerves in Oil, Gold Markets Ahead of CPI
The softer US jobs report for June is only one facet of the risk driver that oil and gold need this week. To complete the picture, Wednesday’s Consumer Price Index, or CPI, report for last month will have to be just as soft to dial down the Federal Reserve’s hawkishness, ensuring the central bank doesn’t go beyond two more rate hikes this year — better still, one.
As a new week began for July, prices of crude and the yellow metal both slid in Asian trade as longs grew anxious about what the CPI report for June could show.
In Monday’s trade, the front-month August gold contract on New York’s Comex was down $3.75, or 0.2%, to 1,928.75 by 02:30 ET (06:30 GMT) after finishing last week little changed.
Weighing on oil was weak economic data out of top importer China. Factory-gate prices in China fell at the fastest pace in seven-and-a-half years in June, data showed, while consumer inflation was at its slowest since 2021, adding to the case for policymakers to use more stimulus to revive sluggish demand.
London-based Brent crude was down 57 cents, or 0.7%, to $77.90 by 02:30 ET (06:30 GMT). Brent hit a one-month high of $78.53 last week to finish with a 4.8% gain after the prior week’s 1.4% rise.
New York-based West Texas Intermediate, or WTI, crude was down 53 cents, or 0.7%, to $73.33. WTI hit a one-month high of nearly $74 on Friday before closing the week up 4.6%, extending the previous week’s 2.1% gain.
Consolidation could limit WTI this week to the 50-day EMA, or Exponential Moving Average, of $71.70, which — if broken — might see bears regain control in pushing for a correction back towards $70.30, or even $68, said Sunil Kumar Dixit, chief technical strategist at SKCharting.com.
The greater likelihood, though, was
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