[Morning Market] Inflation Pressure Eases, Major Event Tonight

Gold Market:

Last night (August 13),Ranking of domestic foreign exchange platforms the U.S. Department of Labor released the July Producer Price Index (PPI) year-over-year, recording 2.2%, which was lower than expected and significantly below the previous value (this also applies to the core PPI year-over-year, excluding food and energy). This indicates a slower-than-expected inflation rate. Coupled with weak employment data in July, economists anticipate that the Federal Reserve will begin cutting interest rates in September, although the extent of the rate cuts remains uncertain.

Richmond Federal Reserve President Barkin stated that although inflation has decreased, commodity prices have reached an unacceptable level for consumers. This suggests that the Federal Reserve still has concerns about cutting interest rates.

A report from the New York Federal Reserve showed that the one-year inflation expectation for July decreased from 3.02% last month to 2.97%; the median three-year inflation expectation fell to 2.3%. The July Consumer Price Index (CPI) data will be released tonight and should be closely monitored.

Technical Analysis: The gold market has been trending bullish, maintaining a range-bound movement over the past four months, with higher lows. There is a high probability of an upward breakout this week. In the short term, a high-level adjustment is expected, and it may be advisable to take long positions after a pullback.

Crude Oil Market:

The International Energy Agency (IEA) released a report indicating a downgrade in next year's crude oil demand growth forecast. The report noted a demand growth of 970,000 barrels per day for the entire year of 2024, consistent with last month's forecast; and for 2025, the demand forecast was revised down from 980,000 barrels per day to 950,000 barrels per day. The global crude oil total demand for this year and next year is expected to be 103.1 million barrels per day and 104 million barrels per day, respectively.

The OPEC monthly report released on Monday (August 12) indicated a forecast of global crude oil demand growth of 2.11 million barrels per day in 2024, down from the previous estimate of 2.25 million barrels per day, and an expected growth of 1.78 million barrels per day in 2025. Although this is higher than the IEA forecast, it also reduces the demand growth projection, which is unfavorable for oil price increases.

Technical Analysis: The daily chart for crude oil shows a narrowing range-bound movement, with an increasing likelihood of a breakout. The support at the $72 level is strong. In the short term, oil prices could surge directly to the $80 level, surpassing the previous high point of the range. After a pullback, it is advisable to continue taking long positions, with attention to the $78.20 support level.

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