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David Becker
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Gold prices continued to rally as the dollar eased in the wake of the softer-than-expected retail sales report. Import prices along with export price rose more than expected. Yields declined on Friday for a third straight trading session which weighed on the greenback and buoyed the yellow metal.

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Technical analysis

Gold prices rebounded and closed up on the session bouncing at support seen at the 10-day moving average at 1,816. Resistance is seen near the 200-day moving average at $1,849. Target resistance is seen near the Fibonacci retracement level of 50.0%, which is seen near 1,876. The 10-day moving average has crossed above the 50-day moving average, meaning that a short-term uptrend is now in place. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 79, just below the overbought trigger level of 80, foreshadowing a correction. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) histogram prints in the black with a flat trajectory which points to consolidation.

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Retail Sales Stall

U.S. retail sales unexpectedly stalled in April. The Commerce Department reported that April retail sales were unchanged following a 10.7% surge in March, an upward revision from the previously reported 9.7% increase. Expectations were for retail sales to rise by 1% in April. Excluding automobiles, gasoline, building materials and food services, retail sales dropped 1.5% last month after an upwardly revised 7.6% increase in March. Core retail sales correspond most closely with the consumer spending component of gross domestic product.

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