Gold Higher Ahead of US Retail Sales

US Retail Sales Up NextLooking ahead today, US retail sales will be the main data event to focus on. With Fed expectations having shifted materially in recent weeks, USD is now subject to downside risks from any weakness in key indicators. Given retail sales’ importance in the overall GDP calculation, the reading is seen as a key insight into the health of the economy. Traders are now eyeing a lengthy pause from the Fed after a further hike in July, with rate cuts expected into Q1 next year. Consequently, any fresh weakness in key US indicators is likely to see these rate cut projections brought forward, weighing on USD near-term.Gold OutlookIf we do see any downside in USD materialise on the back of today’s data, this should translate into better demand for gold. Gold prices have been well bid recently amidst the sell-off in USD. In light of this, gold looks to be a strong candidate to capitalise on any further USD selling. Safe-haven demand linked to further data weakness out of China is also helping keep gold prices underpinned this week.Technical ViewsXAUUSDThe rally in gold prices has seen the market trading back up to test resistance around the 1973.51 area. This is a key pivot for the market and should we break higher here, the focus will be on a run up to 2069.41 next, in line with bullish momentum studies readings. To the downside, 1871.04 remains the key support to note.