Gold fails to benefit from US dollar’s latest performance

Gold Price creeps lower after testing the weekly high around $1786 on Wednesday following the release of positive US data. The retail sales data triggered risk aversion, so, the US dollar’s stance as a safe haven benefited, but the Gold Index was not able failed to capitalize on falling US Treasury bond yields as yields were impacted by signals from Fed speakers who tend to slow the pace of tightening. The Gold Index points to at $1774.24.

US equities declined following the release of Wednesday’s positive economic data as Retail Sales for October grew by 1.3% on a monthly pace, above estimations of 1%, showing consumers pliability amid hot inflationary period.

Other US data revealed that Industrial Production (IP) for October shrank by 0.1% MoM in October, beneath estimates of a 0.2% expansion, the second decline in three months.

Fed policymakers expressed that interest-rates hikes moderation is appropriate, today’s reports gave mixed signals to the central bank. On one side, further tightening is needed, as growing demand will keep prices raised, but weakening industrial activity would need support.

Fed officials said inflation is too high and higher rates are needed. They added that interest-rate increases could slow down soon, though they emphasized that they need work to do, and pausing is not an option.

Kansas City Fed President Esther George said it would be hard to lower inflation without triggering a recession, while Christopher Waller stated that the higher the policy rate, the stronger the case for slowing to 50 bps hikes.