Gold Price Forecast: Will US Retail Sales data propel XAU/USD above $5,100?

Gold hovers below weekly highs of $5,087 early Tuesday, await US Retail Sales data.
The US Dollar enters a downside consolidation phase amid persistent Japanese Yen strength and worsening labor market.
Gold settled Monday above $5,000, now looks to take out $5,100 amid bullish daily RSI.

Dhwani Mehta FXStreet

Gold is holding its pullback from three-day highs of $5,087 reached on Monday, as buyers take a breather early Tuesday, gearing up for the top-tier US Retail Sales data due later in the day.

Gold holds above $5,000, with buyers hopeful

Markets are expecting a cooldown in retail spending by American consumers in December, adding to the expectations of a worsening labor market, with the critical, but delayed, Nonfarm Payrolls (NFP) report slated for release on Wednesday.

“White House Economic Adviser Kevin Hassett said on Monday that US job gains could be lower in the coming months due to slower labour force growth and higher productivity,” per Reuters.

Therefore, potentially discouraging US fundamentals could bolster expectations that the Federal Reserve (Fed) will lower interest rates for the first time this year in June.

Against this backdrop, the US Dollar remains on the defensive after having incurred steep losses on Monday. Industry experts and analysts said media reports that China has urged local banks to diversify from US Treasuries contributed to the USD downside.

Gold, however, is failing to capitalize on the ongoing bearish tone seen around the Greenback as traders take profits off the table after the $425 recovery stint and ahead of high-impact US macro releases due later this week.

After Wednesday’s labor data, the inflation test will come to the fore, with the Fed facing a risk of trade-off. The US Consumer Price Index (CPI) will be reported on Friday.

Gold price technical analysis: Daily chart

The 21-day Simple Moving Average (SMA) climbs above the 50-, 100-, and 200-day SMAs, underscoring firm bullish momentum. Price holds above all rising averages, with the 21-day SMA at $4,896.01 offering nearby dynamic support. The Relative Strength Index (RSI) stands at 56.89 (neutral), easing from prior overbought readings and signaling balanced momentum.

Below, the 50-day SMA at $4,580.73 and the 100-day at $4,310.62 line up as successive supports, while the 200-day at $3,847.79 underpins the broader uptrend. With price above all moving averages and momentum steady, dips could be absorbed at these levels, keeping the bullish bias intact while the market holds above its short-term SMA support.

(The technical analysis of this story was written with the help of an AI tool.)

Economic Indicator

Retail Sales (YoY)

The Retail Sales data, released by the US Census Bureau on a monthly basis, measures the value in total receipts of retail and food stores in the United States. Retail Sales measure the change in the total value of goods sold at the retail level during a year. Retail Sales data is widely followed as an indicator of consumer spending, which is a major driver of the US economy. A result higher than expected is typically viewed as positive or bullish for the USD, whereas a lower than expected result is considered negative or bearish for the USD.

Why it matters to traders?

Retail Sales data published by the US Census Bureau is a leading indicator that gives important information about consumer spending, which has a significant impact on the GDP. Although strong sales figures are likely to boost the USD, external factors, such as weather conditions, could distort the data and paint a misleading picture. In addition to the headline data, changes in the Retail Sales Control Group could trigger a market reaction as it is used to prepare the estimates of Personal Consumption Expenditures for most goods.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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