Gold prices (XAU/USD) increased by nearly 1% on Thursday. This rise came after mixed Retail Sales data and a report showing slower inflation earlier this week. December’s Retail Sales grew by 0.4%, falling short of the expected 0.6%. However, the previous month’s number was revised up from 0.7% to 0.8%. Gold has crossed $2,708 and is now heading toward $2,720.
Why Are Gold Prices Rising?
1. Inflation and Federal Reserve Expectations
The latest inflation data showed a slower rise in core inflation compared to November. This has increased the chances of the Federal Reserve cutting interest rates by 25 basis points in June. According to the CME FedWatch tool, there is now a 63.8% chance of a rate cut, compared to 57.3% earlier in the week.
2. Retail Sales Data
December’s Retail Sales growth of 0.4% was lower than the 0.6% forecast. However, the revised figure for November showed growth of 0.8%. This mixed data has influenced the market and supported gold prices.
What’s Happening in the Markets?
US Treasury Yields
The yield on the US 10-year Treasury note is now at 4.670%, down from 4.807% earlier this week. Federal Reserve officials spoke on Wednesday but gave no major updates on future rate changes.
Global News
In South Africa, 78 bodies were recovered from an abandoned gold mine where illegal miners had been working. Such events highlight risks in gold production and can affect market sentiment.
Technical Analysis of Gold
Gold is facing resistance at $2,708, followed by $2,721. The Relative Strength Index (RSI) shows strong upward momentum but warns of possible overbought conditions near $2,720. If prices drop, key support levels are $2,671, $2,648 (55-day Simple Moving Average), and $2,640 (100-day SMA).
If gold surpasses $2,721, it could test its all-time high of $2,790.
Conclusion
Gold prices are rising due to mixed economic data and market trends. Investors should monitor these movements closely. For more updates, visit Daily Gold Signal. Stay informed with the latest news in our Daily Gold Update.
