Gold pulls back down following release of US Retail Sales data

Gold price falls after the release of US Retail Sales data for August. 

Traders now await the key Fed policy decision, with probabilities favoring a larger 0.50% cut to interest rates، Such a move would boost the attractiveness of Gold.  

Saeed Embabi, CEO of the "iSagha" platform for online gold and jewelry trading, announced that local gold prices dropped by EGP20 . The price of 21-karat gold now stands at EGP 3,455 per gram, while the international price of gold remained stable at $2,570 per ounce.

In addition, 24-karat gold is currently priced at EGP 3,949 per gram, while 18-karat gold stands at EGP 2,961, and 14-karat gold is priced at EGP 2,304. The price of a gold pound coin is now EGP 27,y40.

Gold pulls back to the $2,570s after the publication of US Retail Sales data for August on Tuesday – the last major US macroeconomic data release before the Federal Reserve (Fed) makes its decision on Wednesday. 

US Retail Sales rose by 0.1% in August month-on-month, compared to the revised-up 1.1% rise registered in July. This was above consensus expectations of a 0.2% decline, according to data from the US Census Bureau.  

US Retail Sales ex Autos, meanwhile, rose by 0.1% after a 0.4% increase in July. This was below estimates of a 0.2% rise. 

The data slightly reduced the probabilities of the Federal Reserve cutting interest rates by a larger 0.50% at its September meeting, weighing marginally on Gold. Prior to the release the probabilities stood at 67%, after the data they had changed to 65%, according to the CME FedWatch tool. 

Gold surges as bets increase the Fed will double cut

Gold shot to an all-time-high of $2,589 on Monday after market bets that the Fed will make a double-dose 0.50% cut to interest rates at its meeting on Wednesday rose sharply, according to market-based gauges. 

The expectation that the Fed will slash interest rates is positive for Gold because it lowers the opportunity cost of holding the yellow metal, which is a non-interest-paying asset, thus making it more attractive to investors. 

Gold is entering a bullish super-cycle, analysts say

Longer-term prospects for the precious metal remain upbeat, according to several leading analysts, who are arguing there is evidence that commodities – including Gold – are entering a new bullish super-cycle. 

“The last two times we saw these valuations for commodities was 1971 and 2000,” tweeted Michaël van de Poppe, Founder of MN Consultancy. “Commodities & #Crypto are extremely undervalued and it's likely that commodities go into a 10-year long bull market.”