Gold price continues to oscillate between gains and losses, but in a very tight range as US retail sales figures show a slump. Retail sales in the US fell 1.1%, after rising 0.7% in July. This number was a steeper drop than expected, as markets had predicted a drop of 0.2%. The core retail sales fell 0.4%, which was worse than the rise of 1.6% seen in July. This figure was also worse than the 0.2% increase predicted by market analysts.
The fall in retail sales came from the crash in auto sales and online purchases. The stimulus payments made by the US government have also dried up. The delta variant of the coronavirus is serving to perpetuate the pandemic beyond what was expected by policymakers. Americans are falling short of spending cash and are holding back on purchases.
The situation has put the US economy on the back foot once more, but the US Dollar finds itself being supported by the risk-off sentiment that prevails on the day. Gold price is slightly off by 0.13% as of writing, as the price shifts between slight gains and losses.
Gold Price Outlook
The XAU/USD pair continues to trade around the resistance at 1789.49, as traders prefer to wait for the Fed Chair’s speech later in the day and the FOMC minutes. If prices decline from present levels, the 1763.30 price mark comes into the picture as the immediate downside target. Below this level, 1741.01 and 1719.13 serve as the additional downside targets.
On the flip side, a break of 1789.49 allows the bulls to push gold prices towards 1800.00 and 1815.20 in the first instance. The price zone that lies between 1828 and 1840 lie ahead if the advance continues.