Gold price finds strength on Greenback’s weakness ahead of US Retail Sales

• Gold has sensed decent buying interest around $1,950.00 as investors hope only one interest rate hike is left in the Fed inflation-control toolkit.
• The sentiment of United States households has improved as inflation has softened beyond expectations.
• Hot discussions about the introduction of gold-backed currency by BRICS have improved the appeal for Gold.

Gold (XAU/USD) price has picked up strength after confidently defending the crucial support of $1,950.00 on Monday. The recovery move in the precious metal is backed by an extended weakness in the US Dollar due to easing inflationary pressures in the United States and discussions about an introduction of gold-backed currency by BRICS (Brazil, Russia, India, China, and South Africa) whose motive could be easing the dependence on the Greenback.

Consistently softening of United States inflation amid a stable labor market has improved the sentiment of consumers. Michigan’s Consumer Sentiment Index logged fresh 21-month highs as the burden of high inflation upon households is receding. As inflation has turned out softer than expected and the labor market is also releasing heat, investors are awaiting the release of the US Retail Sales data for further guidance.

Daily Digest Market Movers: Gold price rebounds as US Dollar remains subdued

• Gold price has made a recovery move after building a base around $1,950.00 as the US Dollar Index (DXY) is struggling to revive.
• The US Dollar logged a maximum decline on a weekly basis since November as investors are hoping that interest rates by the Federal Reserve (Fed) will find a peak at 5.25-5.50%.
• Optimism about only one more interest rate hike from the Fed among investors has built due to consistently declining inflation and the labor market conditions have started releasing heat.
• United States inflation report demonstrated a nominal pace in June due to higher interest rates by the Fed and tight credit conditions by US commercial and regional banks.
• US regional banks have inculcated more filters on the credit-disbursement process to maintain asset quality.
• Contrary to investors’ expectations, Fed Chair Jerome Powell and Fed Governor Christopher Waller believe that two more interest rate hikes by the year-end are appropriate. 
• Chicago Fed Bank Austan Goolsbee said on Friday that inflation is still higher than where the Fed wants it to be but has shown progress.” Goolsbee reiterated that central bank policymakers are on a "golden path" to containing inflation without triggering recession.
• Market mood is a little cautious as US corporate has started releasing earnings data. 
• Meanwhile, consumer sentiment in the United States has improved significantly in which major contributors are declining inflation and a stable labor market. The University of Michigan reported on Friday that the preliminary Consumer Sentiment Index (CSI) has logged the highest reading since November 21 at 72.6.
• Preliminary forward five-year consumer inflation expectations matched expectations at 3.1% vs. the prior release of 3.0%.
• This week, investors will keep their focus on the US Retail Sales data, which will be printed on Tuesday at 12:30 GMT.
• Investors are anticipating an expansion in retail demand at a higher pace of 0.5% than the former pace of 0.3%. Retail Sales excluding automobiles are expected to post a 0.3% expansion vs. the prior release of 0.1%.
• Persistent demand from US households could elevate bets for a small interest rate hike from the Fed in its July monetary policy meeting.
• Recovery in the Gold price is also backed by heavy discussions about the introduction of a new Gold-backed currency by the BRICS alliance. The agenda looks clear to avoid heavy dependence on the US Dollar.
• According to the World Gold Council, 71% of global central banks are planning to significantly increase their Gold purchases in the next 6 months by an estimated total of 700 metric tons – worth $49 billion before year-end.

Technical Analysis: Gold price eyes a Rounded Bottom breakout

Gold price is gathering strength to deliver a breakout of the Rounded Bottom chart pattern. A breakout of the aforementioned pattern would send Gold bulls into new territory. Gold bulls would manage to deliver a breakout of the Rounded Bottom by confidently surpassing the horizontal resistance plotted around $1,970.00.

Momentum oscillators are conveyed a non-directional performance as a fresh economic trigger is required for further action