Gold Prices Rise as Weak U.S. Retail Sales Lower Rate Hikes

Gold prices rose on Friday, moving toward a weekly gain as disappointing economic data shifted expectations for U.S. monetary policy. Spot gold increased 0.5% to $4,374.30 an ounce, while futures rose 0.2% to $4,430.05.

The price surge followed a report showing July retail sales fell 0.6% month-on-month to $763.6 billion, missing forecasts for a 0.1% increase. This decline, alongside moderating inflation and a weak jobs report, led the Federal Reserve System to face increased market pressure to maintain current rates. According to the CME FedWatch tool, probabilities shifted to a 67% chance that the central bank will keep interest rates unchanged in September.

These gains were partially tempered by rising Treasury yields and higher oil prices. The latter were driven by ongoing geopolitical tensions between the United States and Iran regarding the Strait of Hormuz.