- The USD manages to preserve Friday’s gains led by mostly upbeat US retail sales data.
- Fading prospects for an immediate Fed rate cut move further weigh on the commodity.
- Positive equities add to the selling bias and do little to lend any support to the metal.
Gold prices edged lower at the start of a new trading week and retreated farther from 14-month tops set on Friday.
The US Dollar staged a solid rebound on Friday following the release of upbeat US monthly retail sales data and prompted some aggressive long-unwinding trade around the dollar-denominated commodity.
The macro data also reduced the already-low chance of any monetary easing by the Fed at this week’s policy meeting and further collaborated towards driving flows away from the non-yielding yellow metal.
The pullback extended through the early European session on Monday amid a mildly positive trading sentiment around equity markets, which tends to undermine the precious metal’s safe-haven demand.
Meanwhile, heightened geopolitical risks in the Middle East, coupled with fears of a further escalation in the US-China trade tensions did little to lend any support or stall the ongoing corrective slide.
It, however, remains to be seen if the current pullback marks the end of the recent positive momentum or is still seen as a buying opportunity as the focus now shifts to Wednesday’s FOMC policy update.
In the meantime, the US economic docket – featuring the release of Empire State Manufacturing Index will be looked upon for some short-term trading impetus later during the early North-American session.
Technical levels to watch
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