The spot gold prices fell half a percent to $1903.20 an ounce, as did gold futures prices that fell by the same percentage to $1906.90. The price chart shows an XAU/USD correction of $1908.87.

That number was not far from the five-week high area. After experiencing a surge in the previous three sessions, the strengthening of US Treasury bond yields and the US Dollar made gold fall slightly in yesterday’s trading 

The yield on 10-year bonds climbed 3.66%, while the United States Dollar Index tried to recover in the range of 103.67. This is related to the release of the American annual inflation.

That number is still holding at the level of 6.0% in February. The inflation rate is still well above the Fed's 2% target, so the urgency of raising interest rates has resurfaced. 

Analyst are Optimistic that Gold will Be Stable 

Even so, the analysts are optimistic that gold's position will still be stable due to the current market risk interest situation. United States inflation data contains nothing that could scare gold bulls looking for a hedge over financial instability.

It was at a time when the Fed may (indirectly) accept that inflation will stay higher for longer. This was said by Nicky Shiels, a chief metals strategist at MKS PAMPSA.

Previously, risk aversion actions in the midst of the US banking crisis did support gold prices. It is because they raised expectations of a slowdown in the Fed's interest rate hike.

Gold is taking a breather after the last rise triggered by the outbreak of concerns. That opinion was stated by Han Tan as an analyst at Exinity.

Meanwhile, China’s Retail Sales Increase

As long as the risk of a domino effect stemming from the SVB problem is still there, then there is still the potential to increase the risk of recession. That in the meantime will make safe haven assets get a good deal.

The world's major banks have begun to raise the outlook for gold, including ANZ and Citi. ANZ even predicted that new gold would meet resistance at $1960.

On Wednesday (15/March), China's National Bureau of Statistics released a number of fundamental data for the first quarter of 2023. Retail sales rose by 3.5 percent year-over-year in January-February.

That became a significant rebound from -1.8 percent. The increase in retail sales is in line with the Chinese government's move to lift its COVID restriction policy in January. 

Industrial Production in China is Also Better 

This action has proven effective in restoring the activities of residents, resulting in increasing domestic demand. Not only retail sales, Industrial Production China also increased. 

It was the industry which measures manufacturing, mining, and utility output. The data gained 2.4% on an annualized basis in the first quarter of this year.

That was even much higher than the previous period's achievement of 1.3%. Meanwhile. The Fixed Asset Investment rose from 5.1% to 5.5% in the same period. 

In fact, market consensus had previously predicted a slowdown to 4.4%. This data measures the expenditure of infrastructure goods, property, and machinery.

The Gain Shows a Strong Recovery

The economic rebound was led by a recovery in Chinese consumer demand. And it seems that the gains this time are really confirming the recovery.

That was even though the rise in retail sales is still helped by seasonal trends from Lunar New Year celebrations and spending on medicines. It was said by Louise Loo, a Chief China Economist at Oxford Economies. 

He continued that China’s factory output also continued its acceleration for three consecutive months. Besides that, it was also in line with the increase in PMI data in the same month. 

According to Loo, the increase in demand for electrical machinery and equipment manufacturing, which reached double digits on an annual basis, is the point of industrial data revival.