Gold price is in ‘no man’s land’ after $40 drop as outlook on U.S. economy shifts – by Anna Golubova (Kitco News – September 16, 2021)

(Kitco News) Gold dropped more than $40 in the aftermath of better-than-expected U.S. retail sales on Thursday. And analysts are now saying that prices are in “no man’s land” as U.S. economic outlook shifts ahead of the Federal Reserve interest rate announcement.

The U.S. retail sales numbers beat expectations in August, rising 0.7% following a drop of 1.8% in July. Market consensus calls were projecting to see a drop of 0.8%.

“The big catalyst on gold selling off was the retail sales number. When you take the economy, and you slice it up into a pie, one part of measuring U.S. economic strength is the retail sector, which has been fairly non-existent for quite a while,” Blue Line Futures chief market strategist Phil Streible told Kitco News. A stronger retail sector could mean a more hawkish Federal Reserve down the road, Streible pointed out.

“August’s surprise recovery in retail could trigger more hawkish commentary from the Fed. Tapering and higher rates just got a little closer. The retail figure is not likely to impact Fed’s interest rate announcement next week. But the central bank will acknowledge they are monitoring the progress,” he said.

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