Gold Surges After Dismal Data; Do You Like Your Rate Hikes Dovish?

As the dollar drops and Treasurys rise on a particularly dour set of econ data, gold is predictably surging.

The contract for August delivery jumped 0.4% to $1,273.80/oz on the Comex after trading little changed prior to the CPI and retail prints:

Gold

Meanwhile, the dollar has hit a fresh low for the session.

As Bloomberg notes, the soft data is “likely raising some concern about the ‘transitory’ nature of recently soft economic data as the FOMC begins its second day of deliberations.”

USD is now lower vs all of its G-10 peers after holding a mixed tone earlier; strongest gainers are commodity FX which were already ahead before the USD fell further after data.

Markets await FOMC rate decision and subsequent press conference from Yellen, with focus on rate trajectory in the second half of the year as well as on details of Fed plans to shrink its balance sheet.

So yeah…. they better figure out how to make this hike extra dovish.