Gold falls below $1,910 as ECB forum concludes

Following three days of speeches by central bank officials at the European Central Bank (ECB) forum in Sintra, it is evident that interest rates have not reached their highest point yet, and any reductions in rates are unlikely to occur in the near future.

According to Jerome Powell, the Chair of the Federal Reserve, the current policy has not been sufficiently restrictive for a significant period of time.

ECB leader, Christine Lagarde, expresses her concern about the lack of clear signs indicating a stabilizing and decreasing trend in underlying inflation, specifically relating to domestic prices.

Andrew Bailey adopted a more careful approach. The governor of the Bank of England (BoE) expressed that the bank will take the necessary actions but it is yet to be determined if the market predictions will come true. Bailey mentioned that there are several predicted future increases in store for us. In response to that, he stated, "Well, let's wait and see."

In Australia, there was a recovery in the retail sector last month. Retail sales experienced a 0.7% growth in May compared to the previous month, surpassing the predicted 0.1% rise. On a year-on-year basis, the sales increased by 4.2%. However, this level of resilience from consumers is not aligned with the expectations of the Reserve Bank of Australia (RBA). The RBA's decision on interest rates is slated for next Tuesday.

Before the release of this retail sales information, the predictions for a 25-basis point hike in interest rates were only at 27% according to futures contracts. However, the likelihood has now risen to 36%. Additionally, three out of the four major local banks are anticipating a rise in interest rates.

More updates are on the way regarding the macroeconomy today.

According to predictions, the consumer price index (CPI) in Germany is expected to increase by 6.3% in June compared to the same period last year. This would be higher than the 6.1% growth observed in the previous month and reinforces the European Central Bank's belief that the battle against inflation is still ongoing.

In the United States, we are expecting the last report on the growth rate of the country's gross domestic product (GDP) for the first quarter (Q1). Experts predict that there will be a 1.4% increase compared to the previous quarter. We also anticipate that there will be an increase of 265,000 in the number of people filing initial jobless claims.

Shortly after, at 3pm, it is expected that pending home sales will decrease by 0.5% compared to the previous month and 17% compared to the previous year.

In another part of the stock market, the value of Micron Technology stocks increased during after-hours trading following the chipmaker's strong third quarter financial results. Instead of the expected loss of $1.59 per share, Micron only experienced a loss of $1.43 per share. Additionally, the company's earnings reached $3.75 billion, surpassing the estimated $3.67 billion predicted by analysts.

According to the CEO of Micron, the increased acceptance of generative AI has led to a greater demand for memory and storage in AI servers. However, the demand for traditional servers used in typical data centers remains unimpressive. Furthermore, the market has observed a positive change in pricing patterns, indicating a decrease in surplus inventory. This suggests that the industry has successfully overcome its previous decline and is now experiencing growth and generating revenue.

There is a significant issue at hand. Micron is currently caught in the midst of a technology dispute between the United States and China. In recent weeks, China's regulator for cyberspace evaluated Micron's offerings in a security examination and consequently prohibited operators from making any purchases.

There is another stock set to announce its financial results tonight after the US stock market closes: Nike. Analysts predict that the company will report earnings of 68 cents per share or generate revenue of $12.58 billion. However, investors are particularly interested in hearing about the company's updated strategy. Nike has been actively pursuing a direct-to-consumer approach, aiming to eliminate the involvement of intermediaries such as wholesalers. In the previous quarter, direct-to-consumer sales accounted for 42% of Nike's total revenue.

Investors are also worried about China, which is a significant market for the brand. Many had anticipated a strong recovery in sales as the country resumed its operations. However, contrary to expectations, the revenue in that region only experienced a marginal increase of 1% during the last quarter.

Crude reserves in the United States experienced a larger-than-anticipated decline in the previous week. This was mainly due to a rise in the exports of unrefined petroleum, which resulted in a reduction of crude stockpiles by approximately 9.6 million barrels.

The supply of gasoline increased by approximately 600,000 barrels, while the reserves of distillates went up by 100,000 barrels.

WTI and Brent experienced a surge in response to the recent development, managing to regain most of the losses incurred due to the actions taken by central bankers earlier this week.