The outlook for gold was dealt another blow in yesterday’s trading session after another round of solid economic data from the US kept open the prospect of another rate hike this year from the US Federal Reserve.
Gold was already reeling from Wednesday’s rate decision from the Fed where they increased rates by 25 basis point, which only added to the attractiveness of the US dollar as an interest bearing asset, something that gold is not.
Followers of gold had been hoping that this may have been the last rate hike for the year which may have given the precious metal some sort of reprieve but after today’s yesterday’s data those hopes have faded.
Retail sales hit the market at 4.5 percent against analysts’ expectations for a figure of 2 percent while the GDP numbers came in at their highest level in 4 years, which show that despite all of the controversy surrounding Donald Trump, he must be doing something right
"Robust U.S. economic fundamentals despite an escalation in trade tariffs have done little to lift demand for the non-interest bearing asset,(Gold)" said Benjamin Lu, commodities analyst at Phillip Futures.
"The outlook for gold prices in the current term remains dim as such in lieu of rising rates and yields amidst buoyant U.S. economic conditions." He added.
President Donald Trump’s accusations against China that they are interfering in the upcoming of Chinese meddling in the upcoming U.S. elections marks a new phase in an escalating pressure campaign against Beijing that Washington is pursuing on multiple fronts, senior U.S. officials said on Thursday.
"The trade war continues to favour the U.S. dollar and this will generally dampen gold's upside," said Nicholas Frappell, global general manager, ABC Bullion, Australia.
"Large speculative shorts may help cushion weakness as punters keep an eye on levels to close out and take money off the table," he added.