The precious metals floundered in early trading Tuesday, the last trading session of July.
Gold prices slumped to about $1,216 per ounce, down $5 (-0.4%).
Spot silver fell farther, losing 0.5% (-8¢) to trade below $15.40/oz. Platinum and palladium were each around unchanged.
Housing Market In Focus
Home prices in the United States have continued to rise, but it appears at a somewhat slower pace than other economic factors would suggest.
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The Case-Shiller home price index was up 6.5% year-on-year during May. However, this actually represents a deceleration from earlier readings. Tariffs on aluminum and lumber have increased costs for builders, so the supply of new homes remains tight.
Aside from housing data, the latest inflation numbers were also released Tuesday. As measured by the personal consumption expenditures (PCE) index, core inflation has risen 1.9% year-on-year. This is within striking distance of the Federal Reserve's target of 2.0% price inflation per year.
Like the housing market, the direction of inflation could be influenced by the White House's trade war. Tariffs tend to increase manufacturing costs, which is then passed on to consumers.
Wall St posted modest gains this morning, with all three major indices advancing about 0.5%.
Meanwhile, the dollar recovered from early losses to trade at 94.25 on the DXY index.
This lifted the euro to $1.1725, yet the pound sterling was steady above $1.314.
Central Banks Hold Keys
Tomorrow kicks off the FOMC's two-day policy meeting. Few expect the Fed to make any changes to interest rates in August, as no post-meeting press conference is scheduled. Rate hikes are expected in September and December, however.
It's a busy week of central bank meetings, in fact. Across the Pacific, the Bank of Japan somewhat surprised markets by standing pat on its quantitative easing program. The BOJ had previously indicated it may reconsider the policy due to its lack of success in stoking higher inflation.
The decision sent the yen lower to ¥111.8 per dollar.
In the meantime, the Bank of England will meet on Thursday. The central bank is likely to raise interest rates this month as it embarks on the tightening cycle that the Federal Reserve has pursued for the past three years.
Estimates for gross domestic product (GDP) growth during the second quarter will also be published in the U.K. Thursday. In the U.S., Q2 GDP is currently forecast to be north of 4.0%. This may be a sign that growth will disappoint in the third quarter.
Crude oil prices followed the precious metals lower. WTI crude lost nearly 1.7% to below $69 per barrel while Brent crude slipped 0.9% to $74.30/bbl.
Bonds saw a bit of demand, pushing the 10-year Treasury yield down two basis points to 2.95%.
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