The gold price has surged higher in late European trading today, travelling in the opposite direction of the US dollar as a round of disappointing data out of the US just before the Fed’s interest rate decision and a shooting in Virginia spooked investors.
At 3.32pm, (GMT) gold was trading at $1,277 up from $1,266 in yesterday’s trading.
Retail sales figures release from the US earlier today came in at -0.3 percent against predictions for a figure 0.1 percent and comes just hours before the US Federal Reserve are widely expected to lift interest rates.
Consumer price index figures also disappointed investors coming in at 1.9 percent, slightly below expectations for a figure of 2 percent but more importantly, decisively below the 3 percent figure the trump administration has promised.
The Fed now has a dilemma on their hands and although they will lift rates later today, the following monetary speech is likely to be bearish, and gold may receive its 2nd boost of the day as further rate hikes may be off the table this year.
"If the Fed hikes, it will most certainly be followed by a dovish comment," Saxo Bank's head of commodity research Ole Hansen said.
"Either way it could signal the end of the latest gold retracement, which has been healthy and not that deep considering the speculative length that was added during the past few weeks." He added.
Also boosting gold’s appeal as a safe haven asset was a shooting earlier today at a baseball game in Virginia where the wounded included 2 police officers and Whip Scalise, a US congressman which caused chaos at the stadium.