Gold Weakens Ahead of FOMC, Investors Heed Powell's Signals
Gold prices weakened in trading on Wednesday (September 17th) morning, pressured by US economic data showing continued solid consumption. This decline occurred despite market expectations for an imminent Federal Reserve interest rate cut. Another contributing factor was profit-taking, which occurred after prices were perceived to have risen significantly.
The latest report showed that US retail sales rose 0.6% in August, higher than expected. Meanwhile, Core Retail Sales also increased, indicating that consumer spending remains strong even though inflation remains above the central bank's target.
This situation has investors reconsidering the outlook for monetary policy. Positive spending data could encourage the Fed to be more cautious in cutting interest rates, increasing the likelihood of a tight monetary policy stance in the short term.
The strengthening US dollar and rising bond yields have also added pressure to the precious metal. A stronger dollar makes gold relatively more expensive for foreign buyers, while rising yields increase the opportunity cost of holding non-yielding bullion.
In addition to fundamental factors, profit-taking after a long rally also triggered the correction in gold prices. Several analysts view this movement as a form of healthy consolidation ahead of this week's crucial FOMC decision.
Although gold faces potential short-term pressure, the medium-term outlook remains positive if the Fed truly begins to ease monetary policy. The market is now awaiting the latest signals from Fed Chairman Jerome Powell to gauge gold's next move.
Source: Newsmaker.id
