Gold started the new week in a calm manner and consolidated the previous week’s gains on Monday. With the trading volumes returning to normal levels following the Labor Day holiday in the US, the XAU/USD pair turned south and lost 1.6% on Tuesday as the risk-averse market environment helped the greenback find demand. Although the pair was able to erase a small portion of its losses on Thursday, it closed the week below $1,800 and lost nearly 2%.
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Gold struggled to recover its losses after breaking below key technical levels.
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Risk-off flows helped USD gather strength throughout the week.
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Investors await US CPI data ahead of Fed's policy decisions on September 22.
What Happened Last Week
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The data from China revealed on Tuesday that Exports rose by 25.6% on a yearly basis in August, compared to the market expectation of 17.1%.
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The US Bureau of Labor Statistics announced that JOLT Job Openings reached a new series-high of 10.9 million in July. On a negative note, the IBD/TIPP Economic Optimism Index fell to its lowest level of 2021 at 48.5 in September from 53.6 in August. These figures failed to impact the market sentiment and the USD preserved its strength against its major rivals.
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The US Department of Labor's weekly publication showed that the Initial Jobless Claims fell to the lowest level since the beginning of the pandemic at 310,000.
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US revealed the Producer Price Index (PPI) for final demand rose to 8.3% on a yearly basis in August from 7.8% in July. After starting the last day of the week in the positive territory.
News to Follow
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The first high-impact data release of the week will be Tuesday's Consumer Price Index (CPI) report from the US. Cleveland Federal Reserve Bank President Loretta Mester said on Friday that she sees upside risks to the inflation forecast and voiced her support for tapering to start before the end of the year.
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On Wednesday, Chinese Industrial Production and Retail Sales figures will be looked upon for fresh impetus.
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Later in the week, Retail Sales and Philadelphia Fed Manufacturing Survey will be featured in the US economic docket on Thursday ahead of the University of Michigan's preliminary Consumer Sentiment Index data on Friday.
Short-Term Outlook
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The initial hurdle is located at $1,800 ahead of $1,815.
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Below $1,790 could open the door for additional losses toward $1,780 below $1,760.
