XAU / USD 4-day rally from $ 1690 lows continued on Friday, buoyed by sluggish market sentiment and optimistic macroeconomic data, reaching one-month highs above 1740 $, only a handful of pips below $ 1,747, the highest price since November 2012.
Gold rallies and the US dollar loses ground
The precious metal traded higher this week as market fears over the second wave of COVID-19 infections have dashed hopes for a rapid economic recovery in countries that have started to loosen restrictions. Beyond that, escalating tensions between the United States and China have increased risk aversion, as investors seek shelter in a safe haven like gold.
On the data side, the negative impact of the United States retail sales dollar data also supported the XAU / USD. The USD lost ground across the board after the US Census Bureau reported a record 14.6% drop in retail consumption in April, beating market expectations of a 12.5% drop.
The 4-hour charts show that the pair is well in overbought territory, after advancing around 2.7% in the past four days, suggesting that the pair may take a break before confirming above the. higher in April.
With Irish sentiment likely to prevail in the coming sessions, as macroeconomic indicators continue to illustrate the global impact of the pandemic, the pair may well extend the break beyond $ 1,744. Once above here, the next targets would be the October 2012 highs at $ 1,796 before attempting to attack the September 2011 highs at $ 1,921.