Most recent article: Gold retreats on risk appetite despite survey showing central bank demand to endure
Gold price (XAU/USD) attracts some dip-buying during the European session on Tuesday and reverses a part of the previous day's modest losses. The incoming US macro data suggested that inflationary pressures are subsiding, keeping hopes alive for the first rate cut by the Federal Reserve (Fed) in September and lending some support to the non-yielding yellow metal. The commodity, however, lacks bullish conviction and remains confined in over a one-week-old range below the 50-day Simple Moving Average (SMA), warranting some caution for bullish traders.
The Fed last week adopted a more hawkish stance and policymakers continue to argue in favor of only one interest rate cut this year. The hawkish outlook remains supportive of elevated US Treasury bond yields, which helps revive the US Dollar (USD) demand and should keep a lid on any meaningful appreciating move for the Gold price. Moreover, a generally positive risk tone might contribute to capping the safe-haven precious metal. Hence, strong follow-through buying is needed to confirm that the recent pullback from the all-time peak has run its course.
From a technical perspective, the $2,333-2,336 region is likely to act as an immediate hurdle ahead of the 50-day SMA support, currently pegged near the $2,344-2,345 region. This is followed by the $2,360-2,362 supply zone, which, if cleared decisively, might prompt some short-covering rally and lift the Gold price to the $2,387-2,388 intermediate hurdle en route to the $2,400 mark. A sustained strength beyond the latter will suggest that the recent corrective slide from the all-time top set in May has run its course and should allow the XAU/USD to retest the $2,450 region.
On the flip side, bearish traders need to wait for a sustained break and acceptance below the $2,300 mark before placing fresh bets around the Gold price. Some follow-through selling below the $2,285 horizontal support will confirm a breakdown and pave the way for deeper losses. The commodity might then accelerate the fall towards the next relevant support near the $2,254-2,253 region. The downward trajectory could extend further and eventually drag the XAU/USD towards the $2,225-2,220 support en route to the $2,200 round-figure mark.
The Retail Sales data, released by the US Census Bureau on a monthly basis, measures the value in total receipts of retail and food stores in the United States. Monthly percent changes reflect the rate of changes in such sales. A stratified random sampling method is used to select approximately 4,800 retail and food services firms whose sales are then weighted and benchmarked to represent the complete universe of over three million retail and food services firms across the country. The data is adjusted for seasonal variations as well as holiday and trading-day differences, but not for price changes. Retail Sales data is widely followed as an indicator of consumer spending, which is a major driver of the US economy. Generally, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.Next release: Tue Jun 18, 2024 12:30
Frequency: Monthly
Consensus: 0.2%
Previous: 0%
Source: US Census Bureau
Retail Sales data published by the US Census Bureau is a leading indicator that gives important information about consumer spending, which has a significant impact on the GDP. Although strong sales figures are likely to boost the USD, external factors, such as weather conditions, could distort the data and paint a misleading picture. In addition to the headline data, changes in the Retail Sales Control Group could trigger a market reaction as it is used to prepare the estimates of Personal Consumption Expenditures for most goods.
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