Gold price struggles to gain any meaningful traction on Thursday and languishes near its lowest level since mid-March touched during the Asian session
. The XAU/USD currently trades around the $1,890 level and seems vulnerable in the wake of the overnight bearish break through the very important 200-day Simple Moving Average for the first time since November 2022.
The US Dollar prolongs its recent upward trajectory witnessed over the past month or so and remains well supported by the Federal Reserve's hawkish outlook, which is seen as a key factor acting as a headwind for the Gold price. In fact, the minutes of the July 25-26 Federal Open Market Committee policy meeting revealed that policymakers remained divided over the need for more rate hikes, though continued to prioritize the battle against inflation.
Adding to this, the upbeat US Retail Sales data released earlier this week indicated that consumer spending held up well in July. Furthermore, the incoming stronger US macro data, including Housing Starts and Industrial Production figures on Wednesday, points to an extremely resilient economy and keeps the door for a further rate hike later this year wide open.
The prospects for further policy tightening by the Fed, meanwhile, add to worries about economic headwinds stemming from rising borrowing costs. This, along with growing concerns about the worsening economic conditions in China, tempers investors' appetite for riskier assets. The anti-risk flow is evident from a generally weaker tone around the equity markets, which is holding back traders from placing aggressive bearish bets around the safe-haven Gold price.
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