On Tuesday, investors' attention was focused on the publication of statistics on the United States. The data turned out to be uneven and forced the yellow metal to spring up a little before the quotes finally took a downward route.
Bullion was supported by the report on retail sales in the United States. Last month, the indicator decreased (mainly due to a drop in car sales) by 1.1% compared to June. This is higher than the predicted value of 0.3%. Core retail sales (excluding the automotive sector) also fell short of expectations and dropped by 0.4%.
Weak statistics negatively affected the yield of 10-year Treasury bonds, as a result of which gold prices rushed up. However, the fall in profitability was short-lived. After the publication of production data in the US, the indicator stabilized, and the dollar rose, which left no chance for the precious metal.
The report on the manufacturing sector was more optimistic. Industrial production in the United States increased last month by 0.9% compared to June, while economists had expected a rise of only 0.5%.
It turned out to achieve such significant dynamics largely due to an increase in the volume of production in the manufacturing industry. Last month, the indicator jumped by 1.4% after falling by 0.3% in June, while economists polled by Reuters had forecast industrial production growth of just 0.6%.
Positive data, giving hope for a further economic recovery, inspired the US currency. On Tuesday, the dollar strengthened against its main competitors by 0.5%, which put pressure on dollar-denominated gold.
The US currency showed growth following the results of two consecutive sessions. Analysts believe that this was facilitated by steady demand, which increased against the background of the conflict in Afghanistan and the active spread of the delta variant of coronavirus. These factors have reduced investors' appetite for riskier assets, such as stocks.
Gold, which is traditionally considered one of the most reliable ways to preserve capital, often competes with the dollar during periods of political and financial uncertainty. At the same time, a higher dollar rate reduces the attractiveness of the yellow precious metal as a low-risk asset.
On Tuesday, being under pressure from the US currency, bullion fell from a weekly high, where they had risen a day earlier. The final price for gold was $1,787.80. The difference from the previous close was $2, or 0.1%.
Yesterday, the price of gold fell for the first time in 3 sessions. However, before starting to decline, the quotes were able to come close to the psychological threshold of $1,800. The intraday peak was the price of $1,797. 60.
Despite the attempts to approach the key mark, which have been observed in recent days, analysts believe that the risks of lower prices still prevail. If the level of $1,792 turns out to be a reliable resistance for the yellow asset, the bullion risks going down to $1,760 in the near future.
Experts believe that the bearish trend can change in the gold market only after the price breaks through the $1,800 mark, where the long-term support and the 50-day moving average are located. This will help to increase the current momentum and return long-term buyers of the precious metal after a 12-month correction from historical peaks.
Meanwhile, analysts are preparing investors for unstable bilateral trade in the near future. It is likely that it will continue until the US Federal Reserve announces the exact timing of the beginning of the reduction of economic incentives.
Today, the market's attention has switched to the minutes of the July meeting of the American regulator. Investors are waiting for the publication to receive additional comments on the beginning of the timing of monetary policy tightening.
"We believe the reduction in upcoming asset purchases is already included in the price of gold – but the pace of those cuts is still quite uncertain," said HSBC analyst James Steele.
In anticipation of the release of data on Wednesday morning, the cost of the main precious metal is growing. So, at the time of preparation of the material, the asset rose by 0.32%, or $5.75, to $1,793. 55.
