On Tuesday (October 16th) in the US market, although retail sales growth in September exceeded expectations, spot gold initially declined and then rose. After the data was released, it fell to around 1920 and then rebounded to the intraday high of 1931.57. Finally, it closed at $1928.17 per ounce, up 0.41% throughout the day, still consolidating its position in the recent high range.
The latest released data shows that the monthly retail sales rate in the United States recorded 0.7% in September, more than twice the expected growth rate of 0.3% on Wall Street. Excluding cars and natural gas, sales increased by 0.6%, higher than Bloomberg's 0.1% growth forecast. Meanwhile, sales in August increased from the previously reported 0.6% increase to 0.8%. Although retail sales growth in the United States exceeded expectations in September, some economists pointed out that some unfavorable factors are affecting American consumers, and early signs of increased credit usage and credit card defaults may to some extent suppress consumer optimism. This indicates that after more than a year of interest rate hikes, the rise in long-term borrowing costs has put downward pressure on demand, but it is currently unclear how this will affect the Federal Reserve's interest rate decision in two weeks. Therefore, this data did not stimulate a rise in the US dollar. Investors then turned their attention to the speeches of Federal Reserve officials this week, including Chairman Powell's speech on Thursday, in search of further clues about interest rate policy. San Francisco Fed Chairman Daley stated that the recent surge in long-term bond yields is equivalent to a 25 basis point interest rate hike. The risk of further interest rate hikes may plunge the economy into recession. Philadelphia Fed President Patrick? Huck said on Monday that the central bank should not bring new pressure to the economy by further increasing borrowing costs. Huck reiterated that the Federal Reserve will not raise interest rates in an environment where inflationary pressure has weakened. According to the CME Group Fedbatch tool, traders believe that the probability of the Federal Reserve keeping interest rates unchanged at 5.25% -5.50% is 90%. The probability of further interest rate hikes in the remaining two monetary policy meetings in 2023 remains unchanged at 30%. Therefore, in terms of economic development and interest rate prospects, the pressure on gold seems to be easing. In addition, the conflict between Palestine and Israel remains the focus of market attention, and the heat of safe haven buying will not quickly cool down in the short term. For this reason, the supportive factor for gold seems to be dominant.
In terms of technical graphics, bulls still seem to be dominant, while on the daily chart, the random indicator with a golden cross pointing upwards suggests that bulls will continue to decline, making it difficult for them to plummet temporarily. At present, the market is still adjusting in a high and narrow range of fluctuations. Below, we will continue to focus on the support of the 1909 and 1899 frontline, while above, we will continue to focus on the pressure of the 1933 and 1946 frontline.
