In June, U.S. CPI for May fell below expectations, prompting market anticipation for a September Fed rate cut, leading to a decline in the dollar index. Mid-month, tensions in the Middle East escalated after Israel’s airstrike on Iran, causing concerns about disruptions in the Strait of Hormuz, which temporarily boosted gold and oil prices. However, limited retaliations from Iran and a ceasefire agreement led to a market recovery, with the S&P 500 and Nasdaq hitting new highs. Powell’s remarks during a congressional hearing indicated no rush to cut rates until clearer economic data emerged. Gold prices retreated, while white precious metals outperformed, with silver and platinum reaching multi-year highs. Copper faced supply tightness, pushing prices towards $10,000.
Domestically, profits for large industrial enterprises fell 1.1% year-on-year, with May’s growth rate dropping to -9.1% due to rising costs from tariffs. Despite weak economic data, the stock market remained strong, driven by expectations of eased trade tensions and increased fiscal support.
In July, the market anticipated a dovish shift from the Fed, with U.S. stocks continuing to rise. The stablecoin bill aimed at boosting demand for the dollar, but concerns about increasing fiscal deficits persisted, maintaining the bullish outlook for gold prices.