Gold Price Prediction – Prices Fall as the Dollar Rebounds Following Strong Retail Sales Report

Gold prices moved lower on Thursday as the dollar rebound following news that the ECB kept interest rates unchanged. The central bank also announced that it would not increase the Pandemic Emergency Purchase Program in July. the ECB’s bond-buying in the final week of June fell to its slowest pace since the expansion of the program. Additionally, stronger than expected retail sales failed to buoy US treasuries as yields slipped slightly.

Technical Analysis

Gold prices moved lower and tested support near the 10-day moving average near 1,797. A break of this level could lead to a test of support near the 50-day moving average near 1746. Resistance is seen near the July highs at 1,815. Medium-term momentum has turned negative 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).

Retail Sales Rise More than Expected

US retail sales rose more than expected according to the Commerce Department. The advanced retail sales rose 7.5% last month. That was on top of the 18.2% jump in May, which was the biggest gain since the government started tracking the series in 1992. Expectations had been for retail sales to rise by 5% in June.