Precious Metals Shine as Inflation Cools and Rate Hike Odds Decline
The metal market experienced overall strength this week, with precious metals leading the charge. The slowdown in US inflation and declining rate hike expectations contributed to this trend. According to data released earlier this month, the US July CPI rose by 3.4% year-on-year, while core CPI slowed to 2.5%. The Federal Reserve's rate hike pricing for September dropped to around 35%, effectively ruling out further rate hikes within the year.
The US dollar index weakened in response to the consumer confidence index dropping significantly and retail sales declining by 0.6% month-on-month. This led to increased support for metal prices, particularly precious metals such as gold and silver. The main COMEX gold contract closed at $4,432.0 per ounce, up 0.70% for the week.
Copper prices fluctuated at high levels due to uncertainty surrounding US-Iran negotiations and energy transmission effects. The Strait of Hormuz navigation has not fully resumed, leading to a weekly increase of approximately 6% in Brent crude oil prices. Elevated energy prices increased transmission pressures on the global economy and temporarily suppressed overall market risk appetite.