Precious metals continue bearish correction
16 May 2023
Tuesday starts with a bearish counter-attack on indices. Experts explain this weakness with worse-than-expected data from China and worries about the potential default of the US. It is hard to imagine that it will be allowed to happen, but this drama keeps reappearing from time to time, filling the headlines.
The data from China came in really disappointing. Industrial production rose by 5.6% instead of 10.9% expected by analysts. Retail sales rose by 18.4%, which may be considered spectacular at first, but the expectations were on the 22%, making it a large miss. Before the start of the European session, we also got data from the job market in the UK. Claimant Count Change came at 46.7K and the unemployment rate rose to 3.9%. This data is disappointing and caused a drop in the value of the GBP on the market.
Tuesday brings about a drop on precious metals, gold making new weekly lows with a clear appetite for more. Silver is in a worse condition still, currently establishing new monthly lows. Oil is also starting the day on the red side of the market. Surprisingly, yesterday we saw rises on oil, which enabled bears to create a fourth negative candle in a row. Despite the Monday rise, the sentiment remains negative.
The data from China and the UK do not deplete the key events in the calendar today. We will learn the inflation number from Canada and the retail sales number from the US. Those two will be published at the same time, so you can imagine the boost and confusion that may arise on the USDCAD.