Gold Price Forecast: Topped out with first two-week losing streak since November 2018

New York (Sept 8)  Gold has likely created an interim top above $1,550 with the first two-week losing run in nine months.

As of writing, the yellow metal is trading at $1,508, representing a weekly loss of 0.76%, having dropped by 0.42% in the preceding week. This is Gold's first two-week losing trend since November 2018.

Also, the current weekly drop is the highest since the third week of April (15 to 21). Back then, prices had dropped by 1.16%.

Gold drops as US yields recover

Gold's weekly loss could be associated with the recovery in the US treasury yields. Notably, the 10-year yield, which had dropped to a two-year low of 1.428% earlier this week, is now trading at 1.55 percent and is set to end the week with 3 percent gains.

It is worth noting that an uptick in the bond yields (or borrowing costs) makes the zero-yielding yellow metal less attractive.

Haven demand dropped on trade optimism

The decision by the US and China to restart trade talks from October put a bid under riskier assets.

The risk sentiment may have also got a boost from the upbeat US data showing an uptick in the wage growth and an acceleration in the service sector growth in August.

The Dow Jones Industrial Average is set to end the week with 1.6% gains, having eked out 3% rise in the previous week.

That risk reset likely weighed over traditional safe-haven assets like Gold and the Japanese Yen. The USD/JPY pair is also reporting a 0.58% gain on a weekly basis.

Looking forward

The focus is on China's trade balance and inflation data and the US consumer price index and retail sales figures.

An above-forecast Chinese exports figure will likely alleviate concerns of a global growth slowdown and further boost the risk sentiment, leading to a drop in Gold.

On similar lines, a better-than-expected US consumer price index and retail sales number will likely force investors to price out prospects of near-term US recession and Federal Reserve easing.

China trade data will be released over the weekend. Meanwhile, the US inflation is scheduled for release at 12:30 GMT on Thursday and the US retail sales will be released at 12:30 GMT on Friday.

FXstreet