Gold surges following US Retail Sales data

Gold prices have seen an upward trend as US Retail Sales data showed a 0.7% increase in September, surpassing the expected 0.3% increase. This comes amid rising Middle-East tensions and the upcoming speech from Fed Chair Jerome Powell, who is expected to provide significant guidance on interest rates.

Gold is up 0.32%, trading at $1926.09 at the time of writing. Investors hope that Powell will favor a neutral monetary policy and join other Fed officials who recently said higher bond yields are sufficient to tame inflation.

The US Dollar Index recovered strongly to near 106.50. Gold price rebounds from around $1,920.00 as investors await the speech from Federal Reserve Chair Jerome Powell, scheduled for Thursday. The 10-year US Treasury yields are hovering near multi-year highs at 4.75%, and Fed policymakers believe that higher yields are sufficient to ease overall spending and investment.

Traders see a 90% chance of the Fed keeping interest rates unchanged at 5.25%-5.50%, with the odds of one more interest rate increase in any of the two remaining monetary policy meetings in 2023 remaining at 30%.