Gold prices edged lower during Tuesday's Asian trade, consolidating just below recent highs as investors awaited the release of United States retail sales data for fresh direction on the Federal Reserve’s policy outlook.
By 3:55 pm AEDT (4:55 am GMT), spot gold was down 0.5% at US$5,031.10 per ounce.
The precious metal has paused after a strong rebound in recent sessions, with traders locking in profits ahead of several high-impact U.S. economic releases.
Market focus is firmly on December retail sales, with expectations pointing to a moderation in consumer spending. A softer reading would reinforce signs of slowing economic momentum and add to concerns about a cooling labour market.
Attention will then shift to the delayed nonfarm payrolls (NFP) report due on Wednesday (Thursday AEDT). The closely watched employment data is expected to provide further clarity on the health of the U.S. jobs market.
White House economic adviser Kevin Hassett told CNBC on Monday that U.S. job gains could slow in the months ahead, citing weaker labour force growth and rising productivity.
Such signals have strengthened expectations that the Federal Reserve could begin easing monetary policy in June. Markets are increasingly positioning for the first rate cut of the year at that meeting, should incoming data confirm a cooling economy.
The U.S. dollar remains on the defensive after posting sharp losses in the previous session. Analysts attributed part of the greenback’s weakness to media reports suggesting that China has encouraged domestic banks to diversify away from U.S. Treasuries, potentially reducing demand for dollar-denominated assets.
Following the labour market update, attention will turn to inflation. The U.S. consumer price index (CPI) report is scheduled for release on Friday (Saturday AEDT) and is expected to play a critical role in shaping expectations for the Fed’s policy trajectory.
