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The vast majority of retail client accounts lose money when trading CFDs.
Important Notice - Fraud awareness
Important Notice - Scam alert
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
Important Notice - Fraud awareness
Important Notice - Scam alert
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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Gold rebounds above $1800 from a softer USD: Eyes on retail sales data

The precious metal gold reclaimed its bullish momentum after testing three months low at $1800 last week. The recovery in gold witnessed during the Asian session today has been favoured by a softer US dollar dominance in the market ahead of the new week. The dollar index (DXY) seems to be consolidating below its all-time high at 105, and is unable to break above this point despite several attempts.

Gold recovery seems to be backed up by optimistic expectations of high data from the US retail sales report to be released tomorrow. The US retail sales report for April will be released this Tuesday. 

This data undoubtedly significantly influences the US economy and determines the dollar strength in the forex market. The market expects the USD to gain further strength with higher retail sales figures and rising interest rates

How does the retail sales report affect a country's currency? 

Regarding the US dollar, an increase in the retail sales report positively affects the greenback value. An increase in housing sales, for instance, shows the economy is growing as more people can purchase a house due to growth in the employment rate.  

On the contrary, a lower retail trade balance will likely reduce the US dollar value. 

What effect will the retail sales report have on gold? 

As expected, an increase in the retail sales data will strengthen the US dollar while hurting gold. If the data rises, gold might decline—below $1800 to the next support at $1767. 

Nevertheless, suppose the retail sales data comes out lower. In that case, US dollar dominance would dwindle, favouring the precious metal gold. Therefore we might expect to see gold soar to the next resistance at $1835 and above it. 

What is the forecast for the retail sales data tomorrow? 

The retail sales data for April should come out higher at 0.7% than the prior print of 0.5% in March. Any figure below will weaken the increasing dollar strength and increase gold prices.

Last Updated: 16/05/2022

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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