Gold has been mostly lower today, but trading conditions are choppy amid decent U.S. economic data, a firmer dollar and persistent geopolitical risks. The latter is keeping the yellow metal underpinned above $1300.
Inflation rose 0.3% in June, in line with expectations. The annual pace remained steady at 2.1%. Core CPI was up just 0.1%, below expectations. Existing home sales, home prices and the Richmond Fed index all beat expectations.
Stocks rebounded from recent downticks, with the S&P 500 setting a new all-time high. The dollar index pushed to a new six-week high. And yet, the yellow metal continues to hold relatively firm on the geopolitical risks.
Some were heartened by the cooperation of pro-Russian separatists is Ukraine turning over the bodied of MH17 crash victims, as well as the black box. However, they and the Russians continue to point the finger at the Ukraine military for shooting down the plane.
Israeli forces continue to pound the Gaza strip, amid ongoing militant rocket attacks. The death toll continues to mount even as diplomats continue to try and broker a cease fire that Hamas might actually abide by. The IDF confirmed today that one of its soldiers is missing.
While events in Ukraine and Gaza have dominant the headlines lately, fighting in Iraq and Syria continues as well. ISIS seems to have shifted its focus back to Syria, capturing the Shaar gas field east of Homs city last week. More than 700 have been killed over the last several days.
Al Arabiya News reports that ISIS in now in control of 35% of Syrian territory, including “nearly all of Syria’s oil and gas fields.” The forces of Bashar al-Assad are going to have to respond aggressively or risk being choked off economically. Look for fighting in Syria to intensify.