Powell Holds Back on Rate Cut Hints, Job Data Surprises, and Gold Dips

A Rollercoaster of Market Moves

Last night and this morning saw a whirlwind of major events shaking up the financial world. It’s like the financial markets decided to throw a surprise party, and everyone’s invited! Let’s break it down and see what’s happened, and how things hit new high when it comes to bitcoin price and more.

The Dollar’s Wobbly Dance

On Tuesday, the US dollar index tried to flex its muscles at the 106 mark but ended up looking like a clumsy dancer at a wedding, tripping over its own feet. By the time the US market closed, the dollar had slipped 0.113% to 105.63. Fed Chairman Jerome Powell tried to soothe everyone by confirming progress in the inflation battle, but it was like telling a nervous guest at the party, “Don’t worry, the cake is still coming!”

Bond Yields Taking a Breather

As Powell talked inflation, U.S. bond yields decided to take a nap. The 10-year U.S. bond yield closed at 4.437%, while the more jittery 2-year U.S. Treasury yield settled at 4.749%. It’s as if the bonds decided to hit the snooze button on their alarms.

Gold and Silver’s Wild Ride

Gold had a moment in the spotlight during Powell’s speech, hitting a daily new high, but then job vacancy data crashed the party, and gold’s excitement fizzled out. Spot gold closed down 0.1% at $2,329.47 per ounce. Silver, always the plucky sidekick, managed to close up 0.25% at $29.52 an ounce. Imagine gold as the main act that forgot its lines, while silver pulled off a cool trick to save the show.

Oil Prices’ Hurricane Hiccups

Oil prices dipped slightly, like someone realizing they added too much spice to their chili. WTI crude oil closed down 0.28% at $83.12 per barrel, and Brent crude slipped 0.08% to $86.54 per barrel. This was after forecasts suggested Hurricane Beryl wouldn’t be causing much trouble. It’s like the weather forecast predicted a storm, but all we got was a light drizzle.

Stock Market’s Upbeat Performance

In the stock market, the major U.S. indexes were in high spirits. The Dow Jones Industrial Average climbed 0.41%, the S&P 500 rose 0.62%, and the Nasdaq Composite jumped 0.84%. Tesla (TSLA.O) stole the show with a 10.20% rise, thanks to stellar Q2 results, bringing its market value above $730 billion. It’s like Tesla arrived at the party with a brand-new outfit, turning heads everywhere. Other tech stars like AMD, TSMC, and Apple also enjoyed a good day, while Nvidia decided to be the contrarian, falling 1.31%.

European Stocks: A Sobering Contrast

Across the pond, European stock indexes weren’t as festive. Germany’s DAX30 fell 0.69%, the FTSE 100 dipped 0.56%, France’s CAC 40 dropped 0.3%, and the European Stoxx 50 slipped 0.48%. It’s like Europe had a different playlist at their party, and it wasn’t quite as upbeat.

Global Financial News Highlights

Now, let’s dive into the nitty-gritty of global financial news and a little on bitcoin price prediction along with cycles bitcoin hit.

Powell’s Progress and Mysterious Rate Cuts

Fed Chairman Jerome Powell reiterated that significant progress has been made in reducing inflation. He sounded optimistic, like a coach who’s seen some solid practice sessions. However, he dodged giving any hints on interest rate cuts, much like a magician refusing to reveal his next trick. Powell emphasized the need for more evidence of falling inflation before considering rate cuts.

Surprise, Surprise: Job Vacancies Up

The U.S. job market threw a curveball with job vacancies rising to 8.14 million in May, defying expectations. It’s like expecting a quiet night in and then having surprise guests show up with a party mood. This marked a pause in the downward trend, showing that labor demand is still hanging tough.

Trump’s Hush Money Case Delay

Court officials announced that the sentencing date for Trump’s "hush money case" has been moved to September 18th. Imagine planning a big event only to have it rescheduled – the anticipation continues.

Biden’s Rallying Efforts

President Biden is gearing up to meet Democratic governors to rally support. Interestingly, a Reuters/Ipsos survey revealed that one-third of U.S. Democrats think Biden should reconsider his re-election bid. Could it be due to poor debate performance? If you think about it, it's like hosting a party and finding out some guests think you should have handed the planning over to someone else.

ECB’s Interest Rate Drama

ECB Governing Council Member Makhlouf expressed satisfaction with the expectation of another interest rate cut, though he hinted that two cuts might be pushing it. It’s like being happy with one scoop of ice cream but contemplating if you can handle two.

Tesla’s Stellar Performance

Tesla’s second-quarter deliveries exceeded expectations, causing its stock to soar 10% and its market value to bounce back above $730 billion. Tesla is like that overachieving student who just keeps acing every test.

Apple’s OpenAI Collaboration

Apple is expected to join the OpenAI board as an observer, looking to strengthen cooperation. It’s like two tech giants teaming up to form a superhero duo.

Unemployment Benefits and Gold’s Surge

U.S. unemployment benefits have been on the rise for nine straight weeks, hitting new highs. It’s the longest stretch since 2018 and suggests more people are struggling to find new jobs. On a related note, spot gold prices surged past $2,355 after initial U.S. jobless claims slightly exceeded expectations, hitting 238,000 for the week ending June 29th.

Gold’s Glimmering Future

Gold prices are getting a boost as Powell’s comments fuel early rate cut expectations. Speaking at a central bank forum in Sintra, Portugal, Powell mentioned “considerable progress” in fighting inflation, hinting that the Fed’s goals are within reach. This is great news for gold enthusiasts, as lower interest rates make holding non-interest-bearing assets like gold more attractive.

Global Factors Lifting Gold

Ongoing conflicts in the Middle East and Ukraine, coupled with political turmoil in Europe, are pushing cautious investors towards the safe haven of gold. It’s like people flocking to a sturdy shelter during a storm.

Gold’s Technical Movements

Technically, gold is breaking new ground. If it closes above key resistance levels, we could see a more bullish phase for gold. Spot gold has twice broken above the trendline connecting the “head” and “right shoulder” of a head and shoulders (H&S) top pattern, invalidating the bearish implications. It’s like gold throwing off a heavy coat and deciding to run free.

What’s Next for Gold?

If gold continues its upward trend, it could target the $2,369 level (the high on June 21) and then the $2,388 level (the high on June 7). However, if it dips below the $2,279 neckline, a reversal could still happen, targeting $2,171. For now, the short-term and medium-term trends are sideways, but the long-term trend remains upward. Gold is like that determined marathon runner, pacing itself but always moving forward.