Gold rebounds above $1800 from a softer USD: Eyes on retail sales data

The precious metal gold reclaimed its bullish momentum after testing three months low at $1800 last week. The recovery in gold witnessed during the Asian session today has been favoured by a softer US dollar dominance in the market ahead of the new week. The dollar index (DXY) seems to be consolidating below its all-time high at 105, and is unable to break above this point despite several attempts.

Gold recovery seems to be backed up by optimistic expectations of high data from the US retail sales report to be released tomorrow. The US retail sales report for April will be released this Tuesday. 

This data undoubtedly significantly influences the US economy and determines the dollar strength in the forex market. The market expects the USD to gain further strength with higher retail sales figures and rising interest rates

How does the retail sales report affect a country’s currency? 

Regarding the US dollar, an increase in the retail sales report positively affects the greenback value. An increase in housing sales, for instance, shows the economy is growing as more people can purchase a house due to growth in the employment rate.  

On the contrary, a lower retail trade balance will likely reduce the US dollar value. 

What effect will the retail sales report have on gold? 

As expected, an increase in the retail sales data will strengthen the US dollar while hurting gold. If the data rises, gold might decline—below $1800 to the next support at $1767. 

Nevertheless, suppose the retail sales data comes out lower. In that case, US dollar dominance would dwindle, favouring the precious metal gold. Therefore we might expect to see gold soar to the next resistance at $1835 and above it. 

What is the forecast for the retail sales data tomorrow? 

The retail sales data for April should come out higher at 0.7% than the prior print of 0.5% in March. Any figure below will weaken the increasing dollar strength and increase gold prices.

Recent News
Start Trading Now!

Try our demo account for free to learn trading. When you’re ready, switch to the live account and start trading for real.

Popular posts

ATFX

The Firm has taken the decision to cease providing services to retail clients, with immediate effect. We are therefore unable to accept any applications.

Services to professional clients will not be impacted. For professional applications please contact [email protected]

ATFX

Restrictions on Use

Products and Services on this website https://www.atfx.com/en-ae/ are not suitable
in your country. Such information and materials should not be regarded as or
constitute a distribution, an offer, or a solicitation to buy or sell any investments.
Please visit https://www.atfx.com/en/ to proceed.

ATFX

使用限制

本网站的产品及服务不适合英国居民。网站内部的信息和素材不应被视为分销,要约,买入或卖出任何投资产品。请继续访问 https://www.atfx.com/en/

ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://www.atfx.com/en/ to proceed.

ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://www.atfx.com/en/ to proceed.

ATFX

Restrictions on Use

Products and Services on this website are not suitable for Hong Kong residents. Such information and materials should not be regarded as or constitute a distribution, an offer, solicitation to buy or sell any investments.

使用限制: 本網站的產品及服務不適合香港居民使用。網站內部的信息和素材不應被視為分銷,要約,買入或賣出任何投資產品。

ATFX

Restrictions on Use

AT Global Markets (UK) Limited does not offer trading services to retail clients.
If you are a professional client, please visit https://www.atfxconnect.com/