• The gold price rebounded last week and has risen 7 out of the last 8 weeks (LBMA 1.4%, XAU 1.2%). The price strength was driven by a weaker US dollar and a steepening yield curve, which was the byproduct of  Fed Chairman Powell’s comments that were more dovish than expected and all but assured a July rate cut.
• The probability of a July 50bps cut spiked again from zero to 25%; this despite CPI data coming in higher than expected (a sign that inflation could be creeping into the market); the US 2/10 curve is near the ytd highs.

July Fed Rate Cut Probabilities

Source: Bloomberg

• COMEX net longs for the previous two weeks were released and showed that two weeks ago, net longs were 917t; it is worth noting that all-time highs in net longs are 1,082t. They fell back to 854t last week but remain very high.

COMEX Net Longs

• Futures open interest has risen to over $100bn this month, driven mostly by COMEX, and is 26% above the ytd average.
• The gold price remains in a bullish flag formation, which would project the price of gold to ~$1,530 if confirmed.

• North American funds were the primary drivers of the $290mn of global gold-backed ETF inflows last week. Flows have continued their June trend with $362mn coming in through the first half of July, almost entirely from North American funds. On the year, there have been global inflows of $5.4bn, with 72% coming from Europe.