Gold Slips Below $1,770 – Stronger US Retail Sales at Play

Gold is trading near a two-week low, with rounds at $1,761 from Thursday’s Asian session. The recent immobility of the precious metal could be attributed to a lack of large data/events. However, after a brief dovish game, conflicting US data and the rejection of Fed minutes added to the general pessimism surrounding the US economy and Fed moves, weighing on GOLD XAU/USD values, not to mention high yields and geopolitical concerns.

US 10-year Treasury yields jumped the most in a week, returning to a monthly high near 2.90%, weighing on Wall Street benchmarks and helping the US dollar reverse the decline seen in the aftermath. of the Federal Open Market Committee (FOMC) meeting minutes. Nonetheless, the US Dollar Index (DXY) ended Wednesday’s North American trading session with daily gains of 0.18% near 106.70.

According to the Fed’s minutes, officials firmly backed the 75 basis point rate hike in August despite expectations that the pace of hikes would slow. The minutes also indicated that Fed officials were concerned that the Fed would tighten more than necessary.

XAU/USD

Meanwhile, US retail sales rose 0.0% in July, versus 0.1% forecast and a revised 0.8% lower. Data from the Retail Sales Control Group, on the other hand, rose to 0.8%, versus 0.6% market expectations and 0.7% previously (0.8% update).

It’s worth noting that Federal Reserve Governor Michelle Bowman recently said that “high inflation and strong employment will almost certainly put some pressure on labor and employment.”

In other developments, Chinese Premier Li Keqiang recently sent a message to local leaders in six major provinces that account for about 40 percent of the country’s economy via the Communist Party’s flagship newspaper People’s Daily.

Earlier, President Xi Jinping and the National Development and Reform Commission (NDRC) expressed readiness to take further steps to counter recession fears. The second tier US data may prompt XAU/USD traders to focus on central banks and growth concerns, not China.

Gold Technical Outlook

The price of gold continues to decline as it nears our forecast target of 1755.25, falling under continued negative pressure from the EMA50, bolstering the odds of breaking above the mentioned level and opening the door for more. of intraday losses, noting that breaking this level will push the price to 1726.60 as the next negative station.

Until price rallies to break through 1779.25 and hold above, we will continue to imply a downtrend for the foreseeable future. Today’s trading range is likely between 1750.00 support and 1780.00 resistance.

Today’s projected trend is bearish.

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