Text/Baiwei Finance: Wang Bing
Source: First Gold Network
First gold network, July 14th. The Democrats of the U.S. Senate Budget Committee reached an agreement on a $3.5 trillion spending and tax plan that aims to promote most of President Biden’s work and family without the support of the Republican Party. initiative.
Overview of Spot Gold Trends
On Wednesday (July 14) Asian markets, spot gold rebounded moderately. As of press time, spot gold was quoted at US$1809.35 per ounce, an increase of 01.04%
(Spot gold daily chart)
Gold prices fell back to around US$1,805 per ounce in early trading in Asia on Wednesday.
Technical side
From the 4-hour chart, the EMA 50 indicator continues to support the gold price. It is currently waiting for the price of gold to gain enough positive momentum to continue to rise in the next few trading days.
News side
3.5 trillion! Democrats reach agreement on Senate budget
According to media reports, Democrats of the U.S. Senate Budget Committee reached an agreement on a $3.5 trillion spending and tax plan designed to advance most of President Biden’s work and family initiatives without the support of the Republican Party. The budget resolution is an outline that will include a description of the budget coordination bill, which includes taxes and social spending that the Democratic Party hopes to pass later this year.
U.S. core CPI hits a new high in nearly 30 years
According to data released by the US Department of Labor on Tuesday, the consumer price index jumped 0.9% month-on-month in June and 5.4% year-on-year. Excluding the volatile food and energy components, the so-called core CPI rose 0.9% month-on-month, and the year-on-year increase reached 4.5%, the largest increase since November 1991. The median forecast from a survey of economists is that the CPI in June increased by 0.5% month-on-month and 4.9% year-on-year.
The Labor Department said that used cars accounted for one-third of the CPI increase in June. The sharp increase in the CPI was largely due to the price rebound in categories related to the wider reopening of the economy, including hotel accommodation, car rental, clothing and air tickets.
Economists have been observing whether price pressure will extend beyond the category that just rebounded after the anti-epidemic blockade was lifted. The cost of living, which accounts for one-third of the CPI’s weight, rose 0.5% in June, the largest increase since October 2005. A 7.9% increase in hotel accommodation prices contributed to this increase.
Wages rose steadily in the second quarter, but rising consumer prices dwarfed them. Another data on Tuesday showed that inflation-adjusted average hourly wages fell by 1.7% in June, after falling by 2.9% in the previous month. Consumers expect prices to continue to rise in the near future. According to the New York Fed’s consumer expectations survey, the median inflation expectations for the next year rose to a new high of 4.8% in June.
Driven by government stimulus measures, residents’ demand for goods is strong, forcing companies to struggle with the increase in orders in the face of shortages of raw materials and labor. This situation has brought rising costs, which are usually passed on to consumers. At the same time, the abolition of anti-epidemic control measures is also driving the demand for services such as travel and transportation, and has also become another factor driving up inflationary pressure.
The year-on-year CPI data has risen sharply in recent months, partly due to the so-called base effect, because last year, during the epidemic lockdown, the CPI fell from March to May. Although the annual increase in CPI is expected to peak, it is not clear to what extent the slowdown will occur in the coming months.
John Ryding, chief economist at Brean Capital, said: “As for inflation, the Fed tells us that it is only temporary. However, price increases are getting faster and faster and longer. The monthly increase we just got is about Twice as expected.”
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