Ella 
Gold/dollar hovered around the $1,901 mark in Asia on Wednesday, as optimistic U.S. retail sales the day before exacerbated concerns about further interest rate hikes by the Federal Reserve and weighed on gold prices.
U.S. retail sales rose 0.7% in July, compared with the previous 0.3% and market expectations of 0.4%, indicating a healthier and stronger U.S. economy. This could lead to market expectations that the Fed may consider raising interest rates at its September meeting, or reduce the appeal of non-yielding gold.
Concerns about a deteriorating economic outlook in China weighed on gold’s ability to maintain its valuation. On Tuesday, the People’s Bank of China unexpectedly cut the one-year medium-term MLF mortgage rate by 15 basis points to 2.50%, which may add to pressure on gold prices. In addition, China’s retail sales in July increased by 2.5% year-on-year, expected 4.8%, the previous value was 3.1%, and industrial output increased by 3.7% year-on-year, expected 4.5%, the previous value was 4.4%.
The dollar rose for a fifth straight day against six major currencies and is now around 103.20. A strong U.S. economy sparked a rally in the dollar. Positive economic indicators may boost demand for the dollar, which in turn weighs on gold prices.
