First Look: World Gold Demand Trends | Market Rundown
What if the Banks Are Wrong on CPI?
Today:
Market Rundown
CPI Rundown
World Gold Council Report
1- Market Rundown
Good Morning. The dollar is up 10. Stocks are on the slightly negative side of unchanged. Gold is down $5. Silver is down 13c. Oil is down 77c. Crypto is unchanged and Grains areall weaker between 70 and 150 bps
Note:
Pre CPI today is all noise. Don’t put any weight on it.
However, the last 2 days, Gold has bucked the DX correlation. Why? Because, as we like to say: They want the Gold. Meaning people are thinking of Gold risk by itself, as opposed to dollar risk manifesting in Gold.
But if they stop wanting the Gold today, the dollar correlation will kick in harshly. The dollar is an excuse to make people act now. The Dollar is not the driver of gold price. This cannot be underestimated in importance of Gold becoming its own market. It is a good, welcome sign and consistent with CB buying.
Good luck
2- CPI Prep Addendum
As hoped we got a view of the GS Trader note on CPI, which is brief and to the point. First, ICYMI: here are CPI estimates and Gold behavior was sent last night :
Moving on: The standout point of the GSTrader for us is rooted in the stock market’s hopefulness this morning.
Stocks Are Hopeful, Not Pessimistic
They note the stock market is still hopeful that there will not be another hike in June, but they is not a 100% certainty yet. Therefore, stocks need that wiped out and may get it if CPI is lower than expected.
The stock market certainly wants a cooler print here. Another 25bp hike in June has not been completely tabled yet (mkt pricing in a 15% probability). The cooler the data the better for stocks right now. Pain trade for fast money community would be cyclicals outperformance on a hot print.
Therefore the market is more hopeful than pessimistic right now. A cooler print is needed tha consensus for a pop implicitly.