Summary:

• US industrial production M/M: -0.1% vs +0.2% exp
• Uni Mich beats forecasts but prior revised lower
• Precious metals make sharp move lower

The final US data of the week has come out in a mixed fashion with industrial production unexpectedly declining for the month of May but the latest Uni Mich survey beating forecasts. First off lets, look at the industrial figures which came in surprisingly weak at -0.1% vs +0.2% expected. A notable upwards revision to the prior reading which now stands at 0.9% from 0.7% previously takes the edge off the negativity of the print. Taking a longer term view the year-on-year reading appears to have flat-lined of late and it remains well below the ISM manufacturing number.  

 Industrial production figures have softened in the US of late and the rise seen since the 2015 low may be under threat. Source: XTB Macrobond

Looking more closely at the release the capacity utilisation also decline, falling to 77.9% against an estimated 78.1%. One of the main factors for the overall decline was manufacturing output which dropped by 0.7% with a rise of 0.1% expected. Not long after these data points we got the final release of note for the week with the University of Michigan consumer sentiment rising to 99.3 from 98.0 prior. This was comfortably above the 98.5 expected but given that the previous reading had been 98.8 before being revised lower, it is not as strong as it appears upon first viewing. Nonetheless the indicator remains in a clear uptrend and mirrors the CB equivalent in suggesting the US consumers are in buoyant mood of late.  

 

 The latest consumer data from the US has extended the run of strong releases that has been seen for some years now. Source: XTB Macrobond

It’s been a bit of a mixed day for the greenback with some gains seen on balance but no clear moves overall. One area where there has been clear moves is in precious metal however with declines of more than 1% seen in Silver, Gold and Platinum. Gold in particular is at an interesting level with price retesting the 2018 lows around 1282.20. The market has pulled back higher in recent sessions but the EMAs remained in a negative orientation. If the market breaches 1282.20 then a gap fill form last December at 1274.10 is possible and potentially larger declines towards swing lows around 1237. 

 Gold looks set for another big down day with the market retesting the year-to-date lows around 1282. Source: xStation