Gold declined by more than $ 40 after the volume of US retail sales turned out to be better than expected on Thursday. Now, analysts say that prices are in the neutral zone ahead of the Fed's interest rate announcement.
It is worth noting that retail sales in America exceeded August expectations, rising 0.7% after falling 1.8% in July. The consensus forecast of market participants predicted a decline of 0.8%.
Retail sales figures were a big catalyst for gold sales. A strong retail sector may mean that the Federal Reserve will become more aggressive in the future.
According to Phillip Streible, chief market strategist at Blue Line Futures, the unexpected August retail recovery may cause hawkish comments from the Fed. And next week, the current retail trade indicator is unlikely to affect the Fed's interest rate announcement.
Edward Maya, the senior market analyst at OANDA, said that the precious metal at $ 1,750 will determine whether prices will recover or there will be a new sell-off. The bullish traders of gold can expect a serious disappointment.
He also added that gold has fallen into a dangerous zone and can easily drop to the level of $ 1,700. This is a very unpleasant moment for its holders, who bought them at the highs during the previous year.
As the closing of this week's trading is approaching, all attention will be on the Fed's Wednesday meeting next week.