Gold retreated on Friday as the US Dollar was supported by upbeat economic data on jobless claims and retail sales. Nevertheless, the precious metals heads for the biggest weekly rise since June amid advance earlier in the week from safe-haven demand. The Greenback strengthened versus most of its major counterparts early on Friday, as data provided further evidence of underlying momentum in the world's number one economy. Strength in the US economy and the greenback normally cools the appeal of gold. Earlier in the week, bullion rose as global equities and the US Dollar plummeted on profit-taking, global growth concerns as well as political uncertainty in Greece.
Taking into consideration the core fundamental statistics, US consumer spending, which accounts for 70% of the US economy, rose in November as lower gasoline prices and gains in wages provided a boost to the holiday shopping season, urging the biggest gain in retail sales in eight months and giving the economy a lift. Sales of US retailers increased 0.7% in November, stronger than the projected rise of 0.4% and the best result since March, following an upwardly revised 0.5% advance in October, the Department of Commerce said. Core retail sales, which exclude automobiles, rose 0.5% in the reported month.
Gold is likely to stay stable on Monday
The beginning of the next trading week will bring only little fundamental news from around the world, which altogether are likely to have the insignificant impact on the price of yellow metal. In Japan, the Tankan large manufacturing index is going to be released in the night between Sunday and Monday. Moreover, US data will show the capacity utilization rate and growth in industrial production of the country.XAU/USD jumps above down-trend despite bearish forecasts
The XAU/USD cross has breached the most important resistance line, represented by the long-term downtrend and is now developing above this level. Therefore, a descending triangle pattern has been confirmed to the north, meaning that the pair has all opportunities to gain further value. At the same time, there is a chance for Gold to return back, in case the US currency recovers in the foreseeable future and economic conditions improve globally. At the moment the most considerable resistance is represented by the monthly R3 at $1,281, while the downtrend changed the role to become the main support. Nevertheless, by the end of the year we would suggest the Gold to depreciate and trade in the direction of the monthly PP at $1,168.Daily chart
The bullion was only little changed in price during the trading session back on Thursday of this week. The metal continued to hover below the weekly R1, which is located at $1,227. This resistance, in turn, is strengthened both by 100-day SMA and the Bollinger band, meaning that a breach of this important line is unlikely in the nearest future, unless there are considerable fundamental factors, which could heat up demand on Gold as the save-haven asset.
Hourly chart