U.S. has just released Retail Sales report for June. The report indicated that Retail Sales increased by 0.6% month-over-month in June compared to analyst consensus which called for a decline of 0.4%. On a year-over-year basis, Retail Sales grew by 18%.
Excluding Autos, Retail Sales grew by 1.3% month-over-month compared to analyst consensus of 0.4%.
The strength of Retail Sales points to the strength of the U.S. economy which is heavily dependent on consumer spending. Strong Retail Sales also indicate that inflation may continue to move higher, which is bullish for the U.S. dollar as higher inflation will ultimately force Fed to cut its asset purchase program.
Meanwhile, S&P 500 futures are gaining some ground in premarket trading, and the market remains close to all-time high levels.
Today, traders will also take a look at preliminary Consumer Confidence report for July. Analysts expect that Consumer Confidence increased from 85.5 in June to 86.5 in July.
Precious Metals Decline After Strong Retail Sales Data
As I noted above, the strong Retail Sales report could provide additional support to the American currency which will be bearish for gold and silver. Silver has recently failed to settle above the resistance at $26.30 and moved back to the $25.80 – $26.30 range while gold tested the support at the 50 EMA at $1815.
In this light, gold mining stocks and silver mining stocks will likely find themselves under pressure at the beginning of today’s trading session.
WTI Oil Tries To Get Back Above The $72 Level
WTI oil is trading near the $72 level as traders try to figure out whether OPEC+ will be able to reach a compromise deal. The market also remains worried about the spread of the Delta variant of coronavirus, although these worries are offset by indications of strong demand for oil.
The situation looks worse in the stock market where oil-related stocks remain under pressure. Today, these stocks may have a chance to gain some ground as oil rebounds, but the short-term trend remains negative.