I. Gold Pulls Back to $4,410 After Intraday Surge

Spot gold trades above $4,400/oz in early August 18 Asian trading, quoted near $4,408.25 after touching a high of $4,436.24. This follows a 0.93% rally in the prior session to $4,416.43/oz. Gold's recent strength reflects cooling US economic indicators and reduced market expectations for a September Fed rate hike.

II. Sequential Cooling in US Economic Data

US July retail sales dropped 0.6% MoM, marking the first decline in nine months. Coupled with soft non-farm payrolls and moderating price metrics (CPI at 3.4% YoY, PPI flat MoM at 4.7% YoY), FedWatch data indicates the probability of a September rate hike has dropped to 35% from over 50% a month prior.

III. Focus Shifts to Upcoming FOMC Minutes

Investors eagerly await the July FOMC meeting minutes. While the Fed held policy rates unchanged at 3.50%-3.75% for a fifth consecutive meeting, three dissenting votes favored rate increases. The minutes will clarify internal committee views on persistent inflation versus softening growth.

IV. Stalled US-Iran Negotiations and Strait Traffic Bottlenecks

Geopolitical friction persists as US-Iran truce arrangements expire without extension. Kpler tracking data showed zero vessel transits through the Strait of Hormuz on Sunday, down from 31 transits two weekends ago. Resulting energy price spikes (Brent above $90.87) re-ignite pass-through inflation concerns.

V. Market Outlook

Gold remains anchored near $4,400/oz. Key resistance sits at $4,450-$4,500, while support rests near $4,400 and $4,375. Softening macro data underpins bullion, though energy-driven inflation risks and geopolitical developments will sustain elevated near-term market volatility.