XAU/USD Steadies Above $2,450 Following US Retail Sales Data

During Friday’s early Asian session, the price of gold remains unchanged at $2,455. US initial jobless claims decreased by 7K to 227K last week; retail sales in July exceeded forecasts, increasing 1.0% MoM. The downward potential of gold may be limited by the growing geopolitical threats in the Middle East.

At around $2,455, the Gold Price Index (XAU/USD) remains stagnant in the early Asian session on Friday. The yellow metal oscillates between gains and losses as the US dollar (USD) continues to consolidate. The preliminary US Michigan Consumer Sentiment Index for August, building permits, and housing starts will be of particular interest to traders.

Fears of a possible recession subsided as speculative interest in the largest economy in the world declined in the wake of positive employment-related data and robust retail sales. The US Federal Reserve (Fed) is still expected by traders to begin loosening its policies in September. The markets are currently pricing in a roughly 80% possibility of a rate decrease in September, according to the CME FedWatch Tool, and they anticipate 200 basis points (bps) of reduction in the next 12 months, albeit that will rely on incoming data.

The US Census Bureau released data on Thursday that indicated the country’s retail sales increased by 1.0% MoM in July after declining by 0.2% in June. This number exceeded the projected increase of 0.3. Initial Jobless Claims for the week ending August 10 came in at 227K, which was lower than the previous week’s 234K and better than the 235K forecast. The positive retail sales and subsequent improvements in job data have supported the USD generally and put pressure on the precious metal.

Nonetheless, the elevated geopolitical risks in the Middle East might provide some support to Gold price, a traditional safe-haven asset. Gaza’s Health Ministry says more than 40,000 Palestinians have been killed in Israeli attacks since October 7, with many more buried under rubble and threatened by illness.