Gold Price Prediction – Prices Trade Sideways Following Weak Retail Sales Report

Gold prices traded sideways on Monday, edging lower. The dollar moved slightly higher along with U.S. yields despite a weaker than expected fall in U.S. retail sales. Import prices into the U.S. came in stronger than expected, keeping inflation expectations slightly elevated.

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Technical analysis

Gold prices edged lower and remain above support near the 10-day moving average at 1,715. Target resistance is now seen near the 50-day moving average at 1,804. Additional support is seen near the June lows at 1,670.   Short-term momentum is positive as the fast stochastic generated a crossover buy signal.  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 9-day moving average of the MACD line. The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Retail Sales Were Weaker than Expected

U.S. retail sales fell more than expected moderately in February as colder than normal weather hampered commerce. Retail sales dropped by 3.0% last month, according to the Commerce Department. Data for January was revised up to show sales rebounding 7.6% instead of 5.3% as previously reported. Expectations had been for retail dropping 0.5% in February. Excluding automobiles, gasoline, building materials and food services, retail sales decreased 3.5% last month after surging by an upwardly revised 8.7% in January. Core retail sales correspond most closely with the consumer spending component of gross domestic product. They were previously estimated to have shot up 6.0% in January.