Advertisement
Advertisement

Gold Price Prediction – Prices Break Out on Soft Retail Sales

By:
David Becker
Published: May 15, 2020, 18:44 UTC

Momentum has turned positive

Gold Price Prediction – Prices Break Out on Soft Retail Sales

Gold prices broke out on Friday, after closing above trend line resistance on Thursday. Gold prices hit a fresh 7.7 year high, taking out the April high at 1,751. Gold prices also closed at a 7.5-year high. This comes following a softer than expected US retail sales report. Industrial production tumbled a record 11.2% in April. Manufacturing output also posted a record drop of 13.7%. Gold prices moved higher despite a rising dollar and unchanged US yields.

Trade gold with FXTM

Regulated By:FCA, CySEC , FSCA, FSCM
Headquarters:Cyprus
Foundation Year:2011
Min Deposit:$10
82% of retail CFD accounts lose money
Official Site:
Demo Account:Open Demo Account
Max Leverage:1:30 (FCA), 1:30 (CySEC ), 1:500 (FSCA), 1:3000 (FSCM)
Publicly Traded:No
Deposit Options:Wire Transfer, Credit Card, Skrill, Neteller, , Local Deposit, , Maestro, Visa, Mastercard
Withdrawal Options:Wire Transfer, Credit Card, Skrill, Neteller, Mastercard, , , PerfectMoney, Maestro, Visa
Products:Currencies, Commodities, Indices, Stocks
Trading Platforms:MT4, MT5, ,
Trading Desk Type:No dealing desk, ECN, Market Maker
OS Compatability:Desktop platform (Windows), Desktop platform (Mac), Web platform
Mobile Trading Options:Android, iOS

Technical Analysis

Gold prices finished the week in the black with higher prices on Friday that saw the yellow metal close at a 7.5-year high. The next level of target resistance on gold is seen near the October 2012 highs at $1,791. Support is seen near the 20-day moving average at 1,709. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram also generated a crossover buy signal as the histogram crossed through the zero-index level with an upward sloping trajectory which points to higher gold prices.

Retail Sales Tumble

Retail sales dropped a record 16.4% in April according to the Commerce Department. Expectations were for a milder decline of 12.3%. This follows an 8.3% in retail sales in March. March figures were revised lower to show a drop of 8.7%. Clothing sales took the biggest hit in April with revenues dropping nearly 79%. Non-store retailers showed a surprising gain. Retail trade overall saw a 15.1% drop from March and a 17.8% slide from April 2019.

About the Author

David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.

Did you find this article useful?

Advertisement