Gold prices fell as the US Dollar rose, supported by US Retail Sales data. Gold prices still have the potential to strengthen, as long as the Fed does not increase the rate.
Gold prices fell in the trading session Tuesday (16/November) night.
XAU/USD slipped 0.40% to $1,854.37, off its high since June 16.
Spot gold was down 0.4% at $1,855.78 an ounce at 17:04 GMT, having briefly touched $1,876.90, its highest level since June 14.
Meanwhile, gold futures on the Comex in New York slipped half a percent to $1,858.20.
The US dollar bounced to a 16-month high, and gold had to succumb to a five-month peak, after US Retail Sales in October rose 1.7% (MoM).
The gain was higher than 0.8% in September, as well as expectations of a 1.4% increase.
The increase in US Retail Sales was also accompanied by solid US employment data.
According to Edward Moya of OANDA, the report shows that the consumption sector can still handle rising prices due to inflation.
"This is quite strong Retail Sales data, so there is an increase in risk in the Outlook.
Gold's gains are slowing down, but we still have a clear view of the potential upside for gold to $1,900," said Moya.
Since last Thursday, gold has gained a total of 2%, supported by stronger US CPI figures.
Han Tan, analyst from Exinity said that the signal of rising inflation which continues to peak, will continue to support demand for gold.
On condition, the Fed continues to keep its commitments at low interest rates.
The President of the Fed for the Richmond region, Thomas Barkin, yesterday gave an explanation referring to the commitment to low interest rates.
He said that the Fed would not hesitate to raise interest rates, but had to wait for rising inflation and the strengthening of the labor sector to show a longer continuity.
"It will be more helpful for us to evaluate, if we wait a few more months. Will inflation return to more normal levels; will the labor sector open up?... I think it would be helpful to wait some more time to make sure the reality is." Barkin said in an interview with Yahoo! Finance.
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