GOLD: The Upward Momentum will be Disrupted?
Spot gold prices plunged nearly $46 on Friday (Feb. 14), mainly due to profit-taking by investors. $Gold - main 2504(GCmain)$ $XAU/USD(XAUUSD.FOREX)$
Spot gold ended Friday's session tumbling $45.76, or 1.57%, at $2882.34 per ounce.
A sharp decline in U.S. retail sales in January pressured the dollar, but gold prices plunged about 1.5% and fell below $2,900 on Friday as traders took profits ahead of the weekend.
Data out on Friday showed that U.S. retail sales contracted 0.9% in January from a year earlier, much weaker than the expected -0.1%.
Gold prices fell heavily despite the slide in U.S. bond yields. The U.S. 10-year Treasury yield fell 5 basis points to 4.48%. U.S. real yields, which are inversely correlated to gold prices, fell 4 basis points to 2.041%.
The market is currently influenced by a number of technical factors, with the failure to break out to new all-time highs on Tuesday potentially forming a double-top pattern, coupled with some investors choosing to take profits ahead of the weekend.”
After a record-breaking week, gold prices may have suffered a profit-taking decline over the weekend.
Despite Friday's sharp pullback, gold prices rose for a seventh consecutive week, mainly due to U.S. President Donald Trump's push for “reciprocal tariffs,” which sparked fears of a global trade war and further boosted safe-haven buying.
Trump on Thursday instructed his economic team to develop a “reciprocal tariffs” program, all countries that impose duties on U.S. goods to take corresponding tariff measures. This potential inflation risk could further boost safe-haven demand for gold, which has been seen as a traditional safe-haven asset against inflation and geopolitical uncertainty.
Gold prices are up about 0.8% this week. Gold prices had touched an all-time high of $2,942.70 on Tuesday. $XAU/USD(XAUUSD.FOREX)$
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