Gold prices inched higher on Tuesday as investors awaited retail sales data from the United States later in the session for cues on the health of the world’s largest economy.
On this background, the spot gold prices inched up by 0.1% to 1,414.92 USD per ounce at 06:15 a.m. ET. Meanwhile, the US gold futures added 0.2% to 1,416.60 USD per ounce.
The price of gold fell over the last three weeks and has been in a consolidation phase, but the markets are focusing on the US retail sales data, which would offer an important economic pointer. The expectations are the retail sales to gain 0.1% in June. The investors will analyze the data and assess the further actions of the Federal Reserve’s monetary policy.
The data is due before major central bank decisions. The European Central Bank issues a rate decision on July 25, while the US Federal Reserve will meet shortly after that. Federal Reserve’s rate cut this month is seen as certain with interest rate futures traders pricing in a 72% chance of a 25 basis point cut and a 28% likelihood of a 50 basis point cut, according to the CME Group’s FedWatch tool.
The precious metal hit 1,438.63 USD per ounce for the first time in six years last month, supported by expectations of a rate cut by major central banks and concerns about the global economy. Gold has not broken the support of 1,400 USD and the fact that it is holding on to these levels suggests there is some substance to the move. Spot gold was holding in a narrow range of 1,404-1,421 USD, and an escape could suggest a direction.
Meanwhile, India’s gold imports rose by 13.04% to 2.69 billion USD in June compared with a year earlier, shows the latest data of the trade ministry.
Among other precious metals, silver rose 0.1% to 15.40 USD per ounce, its highest since June 25, while palladium fell 0.8% to 1,555.04 USD. Platinum gained 0.5% to 843.35 USD per ounce, hovering near a two-month high of 846.53 USD hit in the previous session.
Gold price analysis
Gold is trading in the consolidation area around 1411.33. Growth to 1430.00 seems probable, followed by a decline to 1,407.95 USD. Then the potential for a further decline to 1,382.00 USD may appear.
By the middle of Tuesday’s London trading session, the precious metal’s price was located near previous day’s trading levels, as the hourly simple moving averages had managed to keep the price from declining.
In general, it was expected that the consolidation will end soon and the 55, 100 and 200-hour simple moving averages push the commodity price higher. In that case the commodity price would once more test the resistance of the 1,420.00 USD level.
Meanwhile, watch closely the simple moving averages, as the commodity rate’s passing below all of them could cause a sharp decline down to 1,400.00 USD.
The closely watched gold/silver spread is now nearing levels last seen back in 1993 as gold continues to dominate the space. The February 1993 high around 93.25 is the near-term target and if broken and closed above would leave the all-time high at 100.28 made in February 1991 the next target.
Silver price analysis
Silver remains based on the 15.00 USD handle and has managed to pierce the descending resistance from June 21 highs. The recent break and close above the 200-day moving average has given silver a short-term boost but the metal remains capped by the 38.2% Fibonacci level at 15.54 USD and the recent multi-month high print just a couple of cents higher.
Silver has also drifted into overbought territory and will need a fresh stimulus to keep the recent upside trend intact.
Bulls can aim for 15.64 USD and then 15.80 USD as key levels.
On the flipside, 15.05 USD guards 14.90 USD and then 14.64 USD ahead of the 14.29 USD swing lows. On a continuation to the upside, 15.60 USD is a target level.
Venezuela sold 40 million USD of gold despite sanctions
Venezuela sold gold for 40 million USD, and have managed to bypass the many US sanctions against the Nicolas Maduro regime. The country’s central bank sold nearly one tonne of gold on July 12, lowering its dollar reserves to a nearly three-dollar low of 8.1 billion USD. And while restrictions are lifting Venezuela from the global financial system, Maduro manages to sell gold to companies in countries like the United Arab Emirates (UAE) and Turkey.
Since the beginning of April, the authorities have sold a total of 24 tons of gold.
The US Office for Foreign Assets Control included the Venezuelan central bank on its list of sanctioned organizations in April, hoping to stop the trading.