S&P 500 remains under pressure while silver price dips, EUR/GBP rises

Macro update

UK inflation picks up again: CPI rose to 2.9% in July from 2.6% in June, largely reflecting higher energy costs and increasing pressure on the Bank of England to keep rates higher for longer.

Government bond yields remain elevated: Global bond markets continue to face pressure, with the US 30-year Treasury yield briefly reaching a near 20-year high of 5.34% as investors weigh persistent inflation, higher oil prices and mounting government debt.

Oil prices hold above $90: Brent crude remains above $90 a barrel as geopolitical tensions and uncertainty around the Strait of Hormuz sustain a sizeable risk premium, adding to concerns over the inflation outlook.

Asian equities remain subdued: Regional stocks struggled following Wall Street's technology-led decline, as elevated bond yields and higher borrowing costs raise concerns about stretched equity valuations.

Gold edges higher as yields ease: Bullion recovered modestly to around $4,345 an ounce as US Treasury yields pulled back, although investors remained cautious ahead of the Federal Reserve's latest meeting minutes and further clues on the September rate outlook.

Fed minutes take centre stage: Investors will scrutinise the minutes for signs of how policymakers are balancing persistent inflation against a cooling labour market, with markets currently pricing around a 35% chance of a September rate hike.

S&P 500 continues to come off record high

The S&P 500 continues to slide amid rising bond yields and has so far seen three straight days of falling prices. Further potential declines may take the index towards its 7,621 June peak which may offer support.

Minor resistance above the 6 August low at 7,698 sits at the 5 August 7,794 high and at last week's 7,816 record high.

Short-term outlook: bearish while below the 5 August high at 7,794

Medium-term outlook: bullish while above the 9 June low at 7,238

S&P500 daily candlestick chart

EUR/GBP recovers further

EUR/GBP is still in the process of bouncing off last week's £0.8532 low and is attempting to exceed this week's high at £0.8560. If successful in doing so, the 55-day simple moving average (SMA) at £0.8573 may be reached next, ahead of the late July-to-early August highs at £0.8582-to-£0.8588.

Potential slips may find support between the mid-July high and current August low at £0.8544-to-£0.8532.

Short-term outlook: bullish while above the 12 August low at £0.8532

Medium-term outlook: neutral with a bullish slant while trading above  the 12 August low at £0.8532

EUR/GBP daily candlestick chart

Silver price comes off resistance

Silver has been rejected from its $66.5585-to-$66.8025 resistance zone which has capped the precious metal since last week.

The area between the 11 June low and 6 July high at $63.2765-to-$61.5050 may offer support though. If not, a deeper correction towards the 22 July high at $60.9365 may be reached.

Short-term outlook: bearish while below the 12 August high at $66.8025

Medium-term outlook: bearish while below the 12 August high at $66.8025

Silver daily candlestick chart