Gold Nearly Flat After Sluggish US Retail Sales
Gold's price (XAU/USD) is trading just below $3,000, around $2,990, following a correction after hitting a fresh all-time high of $3,005. Traders are preparing for a busy week with key events:
- German Bundestag vote on defense spending
- US President Trump meets Russian President Putin
- US Federal Reserve (Fed) decision
Daily Digest: Market Movers
US Retail Sales data is impacting the precious metal:
- Monthly Retail Sales: 0.2% (vs. 0.7% estimate)
- Previous reading revised down to -1.2%
- Indicates US consumers are spending less
President Trump plans to discuss territory and assets with Russian President Vladimir Putin, aiming for a potential deal to resolve fighting in Ukraine.
UBS Group AG has raised its Gold price outlook, expecting a global trade war to drive investors toward the safe-haven asset. They project Gold trading at $3,200 in Q2, matching BNP's forecast.
The CME Fedwatch Tool indicates a 99.0% chance of no interest rate changes at the upcoming Fed meeting. The probability of a rate cut at the May 7 meeting is currently at 27.5%.
Technical Analysis: Key Levels to Watch
The $3,000 level is critical and needs to hold. A brief dip below could allow traders to re-enter at a lower price. If $3,000 holds, targets are $3,100 and $3,200 in the coming weeks or months.
- Resistance: $3,004 (recent high), $2,999 (R1), $3,015 (R2)
- Support: $2,989 (daily Pivot Point), $2,973 (S1), $2,962 (S2)
XAU/USD: Daily Chart
Employment FAQs
Labor market conditions are key to assessing economic health and currency valuation. High employment boosts consumer spending and economic growth, increasing the local currency's value. A tight labor market can also impact inflation and monetary policy due to higher wages.
Wage growth impacts policymakers as it affects household spending and consumer prices. Unlike volatile inflation sources, wage growth is a key component of underlying inflation, influencing central bank decisions on monetary policy.
Central banks weigh labor market conditions based on their objectives. Some have mandates beyond controlling inflation. The US Federal Reserve has a dual mandate (maximum employment and stable prices), while the ECB focuses solely on inflation control. Labor market conditions are crucial due to their significance for economic health and direct link to inflation.
(This story was corrected on March 17 at 12:44 GMT to clarify that the Phillips curve is not a perfect match for the Dot Plot curve)