- Gold price gains momentum near $1,925 amid the softer USD.
- US Retail Sales for September rose by 0.7% MoM vs. 0.8% prior, better than expected.
- The escalating geopolitical tensions in the Middle East might boost could boost a safe-haven flow.
- Investors will monitor the Chinese growth numbers, Industrial Production, and Retail Sales on Wednesday.
Gold price (XAU/USD) holds positive ground around $1,925 during the early Asian trading hours on Wednesday. The uptick of the precious metal is supported by a correction of the US Dollar (USD). Meanwhile, the US Dollar Index (DXY), a measure of the value of the USD relative to a basket of foreign currencies, edges lower to 106.19. However, higher US Treasury yields might cap the downside of the USD.
On Tuesday, the US Census Bureau reported that the US Retail Sales for September rose by 0.7% MoM, above the market consensus of 0.3%. Retail Sales Control Group grew 0.6% MoM versus 0.2% prior. The data suggest strong momentum in consumption. Furthermore, US Industrial Production climbed 0.3% MoM, better than the market expectation of 0%. Lastly, Capacity Utilization improved to 79.7, stronger than the estimation. In response to the upbeat data, the Greenback edged higher but the impact was short-lived.
Minneapolis Federal Reserve Bank President Neel Kashkari on Tuesday said that inflation has taken considerably longer than expected and is still too high. Earlier, many Fed officials maintained their dovish stance. Philadelphia Fed President Patrick Harker said that the central bank should not create new pressures in the economy by increasing the cost of borrowing.
However, traders will take more cues from the Fed speakers on Wednesday, including Waller, Williams, and Bowman, which might offer some hints about further monetary policy paths. The hawkish remarks from the Fed officials might boost the USD demand and exert pressure on the US Dollar-denominated commodities, including the Gold price.
Furthermore, the geopolitical tension between Israel-Hamas remains in focus. On Tuesday, authorities in Gaza said an Israeli air attack on Tuesday killed 500 people at a hospital in the Palestinian territory, while Israel stated the damage was caused by a Palestinian attack, per Reuters. The escalating geopolitical tensions between Israel and Hamas could boost the demand for a traditional safe-haven asset like Gold.
Looking ahead, market participants will monitor the Chinese Gross Domestic Product (GDP) for the third quarter, Industrial Production, and Retail Sales due on Wednesday. The downbeat data could weigh on gold price lower as China is the world's largest gold producer and consumer. Traders will take cues from these events and find trading opportunities around the gold price.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.