• Gold takes a breather after a strong rally that saw it break to new all-time highs at the end of last week. 
• Talk of the US economy giving “warning signals” drove safe-haven flows into the precious metal, pushing it to new highs. 
• From a technical point of view, Gold has broken out of a range and is tipped to rally higher. 

Gold (XAU/USD) trades just above $2,500 on Monday as it consolidates the gains made after it broke above resistance to new all-time highs on Friday. The precious metal is supported by lingering doubts about the resilience of the US economy, simmering geopolitical tensions – particularly in the Middle East – and a weaker US Dollar, in which Gold is mostly priced. 

Gold surged to new highs after comments from Chicago Fed President 

Gold surged to a new all-time high of $2,509 on Friday after comments from the President of the Federal Reserve Bank of Chicago, Austan Goolsbee, reawakened US recession fears. Goolsbee said that the US labor market and some other leading economic indicators were “flashing warning signs”. One such sign was rising levels of credit card delinquencies. His words reawakened recession concerns leading to a rise in safe-haven flows to Gold. 

Investors had grown complacent after the release of US Retail Sales data on Thursday showed a 1.0% rise MoM in July, reversing the 0.3% decline in June. The data, along with lower-than-expected Initial Jobless Claims had helped calm fears the US economy was heading for a hard landing. The Chicago Fed President’s remarks, however, suggested a part of the growth in retail sales might be due to consumers borrowing beyond their limits, reviving concerns and increasing haven demand for the yellow Metal.