Gold Becomes More Attractive Amid Declining Retail Sales and Sentiment
Gold prices strengthened during Friday's trading (August 14) after US retail sales for July fell by 0.6% month-on-month—far worse than the projected 0.1% increase. Bullish sentiment was further bolstered by the preliminary University of Michigan (UoM) Consumer Sentiment reading for August, which dropped to 51.0 from the previous 55.2, falling well below the forecast of 54.5. These two data points indicate a weakening in both US consumption and consumer confidence, leading the market to increasingly anticipate that the Federal Reserve will hold interest rates steady in September. The subsequent weakening of the dollar and Treasury yields served as positive catalysts for gold.
However, the Michigan survey results also introduced a hint of hawkish sentiment, as one-year inflation expectations rose to 4.3% from 4.2%, while five-year inflation expectations remained at 3.3%. In essence, economic pressures are supporting gold through expectations of a Fed rate hold, yet inflation concerns have not entirely dissipated.
Gold price at the time of this analysis: $4,386
- Buy if the price moves to $4,396
- Sell if the price moves to $4,376
Resistance 2: $4,420
Resistance 1: $4,406
Support 1: $4,366
Support 2: $4,352
Note: This article is analytical in nature and does not constitute definitive advice. Please consider the impact of fundamental and technical developments on trading before making any investment decisions.
Source: Newsmaker.id
