Gold price surged to $2,691 during the North American session on Thursday amid uncertainty surrounding the US elections. Despite the robust Retail Sales and job data in the US, Gold failed to reach $2,700, trading at $2,691. The US 10-year Treasury yield rose to 4.096%, capping Gold’s advance as the US Dollar Index reached a two-month high.
The US Department of Commerce reported Retail Sales slightly above estimates, while the Labor Department revealed fewer Initial Jobless Claims. This data led to a rebound in the US 10-year Treasury yield and a dip in Gold price to $2,672, although it has since recovered. The US Dollar Index rose to 103.79, a nearly two-month peak, despite Gold shrugging off the broad US Dollar strength.
The Atlanta Fed GDP Now estimates US GDP growth to be 3.4%, up from 3.2% on October 9. Traders have reduced their bets on a Federal Reserve rate cut in the final two meetings of the year, with odds of a 25 bps reduction in November dropping to 88.2%. The uncertainty surrounding the US elections and geopolitical tensions have increased the appeal of Gold as a safe-haven asset.
US Retail Sales for September rose by 0.4% (MoM), exceeding estimates of 0.3%. Initial Jobless Claims for the week ending October 12 came in at 241K, below estimates. US Industrial Production contracted by -0.3% MoM, influenced by external factors. Data from the Chicago Board of Trade suggests investors anticipate 48 basis points of Fed easing by year-end.
Gold’s technical outlook remains bullish, with the XAU/USD spot price eyeing the $2,700 level. The Relative Strength Index (RSI) indicates buyer momentum, with resistance at $2,696 and potential targets at $2,750 and $2,800. Conversely, a drop below $2,670 could lead to a retracement towards $2,650 and further support at $2,600 and the 50-day Simple Moving Average at $2,561.
The Retail Sales data from the US Census Bureau is closely monitored as an indicator of consumer spending in the US economy. Monthly changes reflect the rate of sales in retail and food stores, with adjustments for seasonal variations. A high reading is seen as bullish for the US Dollar, while a low reading is considered bearish. The latest data showed a 0.4% increase, exceeding expectations of 0.3%.
In conclusion, the surge in Gold price to $2,691 amid uncertainty over the US elections and geopolitical tensions has drawn investors to the precious metal. Despite positive Retail Sales and job data in the US, Gold failed to breach $2,700 as the US Dollar Index strengthened. The technical outlook for Gold remains bullish, with resistance at $2,696 and potential targets at $2,750 and $2,800. Traders have reduced bets on a Fed rate cut, with odds for a November reduction dropping to 88.2%. The Retail Sales data remains a key economic indicator, reflecting consumer spending trends in the US economy.
