Article by: ETO Markets

Gold prices (XAU/USD) have been rising steadily due to lower-than-expected U.S. retail data. In May, U.S. retail sales increased by 0.1% month-over-month, falling short of the anticipated 0.3%. Core retail sales also decreased by 0.1%, below the expected 0.2%. These figures suggest that inflation is effectively being controlled and moving towards the Federal Reserve's (Fed) target of 2%. The string of weak data has sparked speculation among investors that the Fed might implement a more accommodative monetary policy this year, thereby strengthening gold prices.

From a technical perspective, gold prices are reversing the downtrend. They are about to break above the 20-day Simple Moving Average (SMA) at $… and challenge the 50-day SMA at $…, aiming to turn this resistance into strong support. Gold sellers are gradually losing their dominance, as they have consistently failed to break the $… level, causing a loss of confidence and an inability to attract new bearish bets.