Gold Prices Weaken as US Dollar Strengthens Amid China

Heading into Tuesday's trading session, the price of gold remains subdued as the US Dollar strengthens, supported by rising Treasury yields.

The entire metals sector is experiencing a general decline, hampered by the robust Dollar and diminishing appetite for assets tied to risk and growth.

Among the metals, industrial varieties have suffered more pronounced setbacks compared to the precious metal, as concerns about China's prospects have escalated.

The preceding week saw a combination of weaker economic indicators in China, compounded by the defaults of prominent property firms, Country Garden and Ocean Sino. Country Garden failed to meet its US Dollar coupon obligations last week, while trading in its domestic debt, along with Ocean Sino's, was suspended this week.

Market participants are eagerly anticipating decisive measures from authorities to address the prevailing economic uncertainties.

A wealth of Chinese economic data will be meticulously examined to glean further insights into the state of the world's second-largest economy. Further details can be accessed here.

The People's Bank of China (PBOC) set a stronger reference rate for the Yuan today at 7.1768 against the USD. Additionally, the bank has lowered the medium-term lending facility rate from 2.65% to 2.50%.

XAUUSD BUY 1904-1906💯

✅ TP1: 1909
✅ TP2: 1914

🛑 SL: 1899

Comment:

Gold prices softened on Tuesday, maintaining proximity to the significant psychological threshold of $1,900. This came as U.S. bond yields and the dollar sustained their higher positions, in anticipation of the upcoming retail sales data, which could provide insights into the ramifications of increased rates on consumer expenditure.

Comment:

Spot gold
GOLD
declined by 0.2% to reach $1,905.10 per ounce as of 0119 GMT, hovering close to its lowest point in the past month and a half, which was reached in the preceding session. U.S. gold futures
GOLD
also experienced a decrease of 0.3%, settling at $1,938.20.

Comment:

With concerns surrounding China's economy, the U.S. dollar reached its highest point in over a month on Monday, contributing to higher costs for international purchasers of bullion. Simultaneously, U.S. 10-year Treasury yields approached their peak levels since November.

Comment:

In an unforeseen move, China's central bank reduced key policy rates on Tuesday due to the underperformance and sluggish growth of the world's second-largest economy's industrial output and retail sales, both of which fell short of predictions.

Comment:

BUY AGAIN 1904-1906💯

✅ TP1: 1909
✅ TP2: 1914

🛑 SL: 1899

Comment:

In July, Chinese industrial production, retail sales, and fixed asset investment saw growth below initial expectations. Simultaneously, the urban unemployment rate experienced an uptick, compounding worries about the nation's decelerating economy.