Gold Remains Indecisive, on Weak US Retail Sales Data

By Octa

Gold Remains in Uncertainty

Gold Remains Indecisive, the XAU/USDpair has been trading within a sideways range of $2,300.00—$2,333.00 since the start of the week. Yesterday, it saw a modest increase of 0.45%. The US retail sales report fell short of investor expectations, leading to a decline in theUS Dollar Index(DXY). However, the market responded cautiously to this news.

“The relatively subdued US Retail Sales data has strengthened expectations for an imminent Federal Reserve rate cut. The data indicated a growth of 0.1% compared to the expected 0.3%, suggesting sluggish economic activity in the second quarter. Coupled with previous figures, this has heightened investor anticipations for a rate reduction possibly as early as September this year.

Currently, traders are divided into two camps. Some view the decline in US Treasury yields and the restrained fluctuations in the dollar as potential catalysts for a decrease in gold prices. Conversely, others, based on the latest economic indicators, anticipate a rate cut that could bolster the XAU/USD pair. According to FedWatch, traders expect a 67% likelihood of a rate cut in September.”

As reported by Reuters,

“Federal Reserve officials, heartened by recent data, are seeking further confirmation that inflation is cooling and monitoring signs from a robust labour market as they cautiously steer towards anticipated interest rate cuts by year-end.”

Additionally, according to the annual review by the World Gold Council (WGC), more central banks plan to bolster their gold reserves this year, with many expecting others to follow suit despite high precious metal prices. However, it’s notable that central banks paused their gold purchases in May, and the continuation of this trend poses a risk to gold price growth.

Today, no significant reports are anticipated. The market volatility is expected to be moderate. The XAU/USD pair is poised to test the resistance level at $2,340.00. The support level is anticipated at the previous day’s low of $2,306.00.

Source : investing.com