gold prices are experiencing a period of consolidation near record highs, showing resilience in Asian trading on Thursday. Buyers are eagerly anticipating the upcoming US Retail Sales data, which could influence the next significant movement in the market.
The recent pullback of the US Dollar is benefiting gold , particularly as concerns regarding China’s economic recovery continue to weigh on market sentiment. Despite China’s efforts to bolster its property sector — such as a pledge to increase credit for critical projects — the response from local equities has been tepid. These measures, aimed at addressing weaknesses in the housing market, have not successfully restored confidence to the major indices, highlighting the ongoing economic challenges in China, the world’s largest gold consumer.
In addition to these factors, a slight rise in US Treasury bond yields is also presenting a cap on gold prices. Traders are beginning to take profits from their US Dollar positions as they await crucial economic data. The anticipation surrounding the US Retail Sales report is especially heightened this week, as it could provide further insights into consumer spending trends.
Expectations around the impending US presidential election are also impacting market dynamics. Recent rallies in the US Dollar have been fueled by beliefs that Donald Trump is likely to secure victory, with many viewing his proposed fiscal policies as potentially inflationary, which tends to favor the Dollar.
Looking ahead, a 25 basis point interest rate cut by the Federal Reserve in November is widely anticipated, meaning that any fluctuations in the Retail Sales data may not drastically change rate cut expectations for December. Nevertheless, gold prices are expected to be influenced by broader risk trends and macroeconomic updates.
From a technical standpoint, gold managed to close above the critical $2,670 resistance level, inching closer to a record high of $2,686. Indicators suggest further potential for upward movement, with the next target set at the psychological $2,700 level. Immediate support is found at $2,670, and a drop below this point could lead to further tests at lower support levels.
