Gold price gathers strength for a fresh monthly high as Greenback sticks near annual lows

• Gold price oscillates in a narrow range of around $1,960.00 ahead of US Retail Sales data.
• Further policy tightening by the Fed is widely anticipated as the United States inflation needs to fall near 2%.
• US Yellen says the US economy will dodge a recession.

Gold price (XAU/USD) is demonstrating auction in an inventory adjustment phase after climbing to near three-weeks high of around $1,960.00 on Tuesday. The precious metal has picked strength as discussions about introducing a novel gold-backed currency by the BRICS (Brazil, Russia, India, China, and South Africa) have improved its appeal. In addition to that, the broader softening of inflationary pressures in the United States economy has ramped up demand for Gold.

The United States Consumer Price Index (CPI) turned out softer -than- expected and labor market conditions eased in June. There is no denying the fact that heated inflationary pressures have cooled down, while further policy -tightening from the Federal Reserve (Fed) is widely anticipated to help return inflation steadily below the 2% target.

Daily Digest Market Movers: Gold price aims further recovery 

• Gold price extends recovery above $1,960.00 as the US Dollar Index resumes its downside journey after failing to sustain above the psychological resistance of 100.00.
• Rising odds of only one more interest-rate hike from the Federal Reserve have propelled strength in Gold.
• Meanwhile, a small interest rate hike of 25 basis points (bps) by the Fed in its July monetary policy meeting is expected, according to bets at the CME Group Fedwatch tool.
• The appeal for the US Dollar Index has faded as the BRICS alliance is in discussions about the introduction of a new gold-backed currency. The motive behind launching a new currency seems to be de-dollarization.
• The US Dollar Index has tested its fresh annual support of 99.60. More downside in the safe-haven asset seems hopeful as United States inflation has softened significantly.
• The yields offered on 10-year US Treasury bonds have tested territory below 3.8%.
• Consistently declining gasoline prices and demand for second-hand automobiles have eased red-hot inflationary pressures.
• Despite inflation has softened significantly, risks of a recession are still elevated as current price growth is still far from the desired rate of 2%.
• While investors are anticipating that the US economy will enter into a recession, US Treasury Secretary Janet Yellen has a different viewpoint. Yellen said on Monday that the economy is making good progress in bringing inflation down and she doesn’t expect a recession, Bloomberg report.
• Last week, President of the Federal Reserve Bank of Chicago Austan Goolsbee said “Inflation is progressively declining but is still higher from where the Fed wants it to be.” Goolsbee reiterated that central bank policymakers are on a "golden path" to contain inflation without pushing the economy into a recession. 
• On Tuesday, investors will keep an eye on the monthly Retail Sales data from the US, which will be published at 12:30 GMT.
• Credit Suisse expects Retail Sales growth to accelerate in June, driven by strong auto sales. They expect headline retail sales to grow 0.8% MoM. Retail sales ex-autos and gas are set to increase by 0.2% MoM.
• Robust demand from households could allow Fed Chair Jerome Powell to raise interest rates twice by the year-end.

Technical Analysis: Gold price needs decisive break above $1,960

Gold price is forming a bullish Cup and Holder pattern whose breakout results in a reversal move. The chart pattern trades back-and-forth around $1,960.00. The release of the US Retail Sales data might trigger a power-pack action.

Gold price is expected to attract fresh bids after a confident break above the crucial resistance level at $1,960.00. The upside bias could fade if Gold price fails to maintain auction above the $1,940.00 support.