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Gold Price Forecast: XAU/USD pares weekly gains below $1,800 ahead of US Retail Sales

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Gold Price Forecast: XAU/USD pares weekly gains below $1,800 ahead of US Retail Sales

 

  • Gold remains pressured after reversing Tuesday’s gains, sidelined of late.
  • Risk appetite sours amid anxiety over Fed’s next moves, covid and China news.
  • US Retail Sales may help recede Fed tapering bets, favor gold buyers on matching down expectations for August.

Gold (XAU/USD) takes offers around $1,792.50, extending the previous day’s losses heading into Thursday’s European session.

The yellow metal failed to benefit from the US dollar weakness on Wednesday as market sentiment dwindles over the Fed’s next moves even as the US Consumer Price Index (CPI) favored equities and weighed on the US Treasury yields.

The reason could be linked to the cautious optimism shown by the European Central Bank (ECB) policymakers and strong NY Empire State Manufacturing, as well as Import-Export Price Index data for September and August respectively.

Among the ECB policymakers, Executive Board Member Isabel Schnabel was more hawkish while saying, “Market may be overestimating risks to the global growth outlook.” On the same line was ECB Chief Economist Philip Lane who said that he is happy that the accommodative monetary policy is helping to build core inflation in the euro area, as reported by Reuters.


 

It’s worth noting that Australia’s trilateral security pact with the UK and the US, availing nuclear-powered submarines, signals a further worsening of relations with China and weighed on market sentiment earlier in the day. Further, higher virus infections in Australia, China and New Zealand also challenge the risk appetite, as well as gold prices.

It should be noted that the US adds the UK to its welcome list for the next week’s diplomatic talks in the White House and amplifies market fears that the Western friends are again gearing up for a battle with China, which in turn heavy the sentiment.

Amid these plays, S&P 500 Futures erase early Asian gains while the US 10-year Treasury yields drop one basis point (bp) to retest 1.297% continue reading with FX Street...

 

 

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