Gold Consolidates as Dollar Edges Lower

Gold prices remained range bound but edged higher as the dollar lost ground paving the way for higher gold prices. Monday’s economic data showed a weaker than expected U.S. empire manufacturing index as well as a softer than expected retail sales ex-autos report.  Support on gold is seen near the 10-day moving average at $1,339, while resistance is seen near the April highs at 1,366. Momentum is neutral as the MACD (moving average convergence divergence) index prints near the zero index level with a flat trajectory which reflects consolidation.

U.S. Empire State manufacturing index fell 6.7 points to 15.8 in April after jumping 9.4 points to 22.5 in March. It was 4.1 a year ago and compares to the 18.3 6-month average. Weakness was broad-based. The 28.1 print from October was the highest since September 2014. The March employment component dipped to 6.0 from 9.4, but the workweek rose to 16.9 from 5.9. New orders slid to 9.0 from 16.8. Prices paid slipped to 47.4 from 50.3, with prices received at 20.7 from 22.4. The 6-month outlook index tumbled to 18.3 from 44.1, with the future employment gauge at 13.1 from 23.3, while new orders were 18.5 from 43.0, prices paid at 54.8 from 55.9, and capital expenditures at 25.2 from 29.4.

Retail Sales Beat on the Headline and Missed on the Core

U.S. retail sales increased 0.6% in March with the ex-auto sales up 0.2%. The better than expected headline figure broke a string of three monthly declines. The 0.1% dip in February sales was not revised January was bumped down to -0.2% from -0.1%. There was no revision on the February 0.2% ex auto gain.  Excluding autos, gas, and building materials sales rose a solid 0.4% from 0.1% and is the best since November. Motor vehicles and parts climbed 2.0% from -1.3%. Gas station sales dipped 0.3% from 0.1%. Building materials fell 0.6% from 2.0%. Non-store retailer’s sales increased 0.8% after the prior 0.9% gain. Sporting goods sales dropped 1.8% after the prior 3.3% gain.