Gold prices have been consolidating in a narrowing range lately, with the recent rise in expectations of higher interest rates in the US caps the dismal recovery attempts. Despite the greenback is on the defensive against major counterparts since the start of this week, the yellow metal fails to attract a more robust buying interest and remains close to the 20-DMA at $1,195.
On the one hand, the precious metal shows some signs of stabilization, with the latest significant decline was limited by lows just below the $1,190 figure. On the other hand, the solid US economic fundamentals coupled with the ongoing US-China trade war keep the greenback in the bullish trend, despite some negative pressure recently.
The US retail sales data are due on Friday, with another spectacular release could cement Fed rate hike expectations further and dent the emerging recovery in gold prices. For now, federal-funds futures point to a 80% probability of the Fed rate hike two more times this year, while just a month ago, the probability was around 60%. As such, downside risks for the yellow metal persist, and the prices could yet challenge the $1,190 in the coming days.