Precious metals start a rally after soft US CPI data – TDS

Precious
metals
rally
started
after
below
expected
US
inflation
data
hit
the
market.
Asian
demand
for
Gold
(XAU/USD)
and
Silver (XAG/USD)
goes
up,
TDS
senior
commodity
strategist
Ryan
McKay
notes.

Asian
demand
is
set
to
remain
strong

“Below
expected
inflation
data
is
compounding
the
precious
metals
rally
after
softer
employment
data
had
already
bolstered
expectations
of
a
September
start
to
the

Federal
Reserve
(Fed)
cutting
cycle.
In
this
sense,
a
key
macro
cohort
that
has
been
on
the
sidelines
thus
far
is
increasingly
likely
to
regain
interest
in Gold.”

“Indeed,
the
first
evidence
of
renewed
interest
is
starting
to
show
as
ETF
positions
continue
to
rise
in
July,
after
June
saw
the
first
monthly
increase
since
May
2023.
Furthermore,
while
Chinese
Gold
reserves
were
flat
for
a
second
consecutive
month,
top
traders
on
the
Shanghai
Futures
Exchange
(SHFE)
have
added
back
to
their
net
positions,
highlighting
Asian
demand
is
set
to
remain
strong.” 

“Silver is
also
surging
as
Chinese
interest
has
ramped
up
in
recent
weeks,
with
traders
adding
roughly
+20k
SHFE
lots
to
their
net
position
in
July.”