Gold Price Prediction – Prices Whipsaw Following Stronger US Retail Sales

Gold prices whipsawed for a second consecutive trading session as indecision became the theme of the day. US yields surged higher, but the greenback was unable to gain traction as yields in Europe surged even more. Stronger than expected US retail sales, in conjunction with sold US sentiment was the catalyst that weighed on gold prices.

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Technical Analysis

Gold prices whipsawed attempting to rally but failing after testing  10-day moving average at 1,512 and then moving lower. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal in oversold territory. Currently the fast stochastic is printing a reading of 16, which is well below the oversold trigger level of 20 which could foreshadow a correction. Medium-term momentum is negative as the MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices. Prices are forming a topping pattern, and have been unable to gain traction. The weight of the ECB rate cut and stronger than expected US data will keep the dollar buoyed which should weigh on gold prices.

US Retail Sales Rise

The Commerce Department reported on Friday that US retail sales rose moderately in August, driven higher by a jump in auto buying and healthy online sales. The Commerce Department says retail sales increased 0.4% last month, down from 0.8% in July. Excluding autos, sales were unchanged for the first time since February. Online sales continued to soar, rising 1.6%, roughly the same amount as in July, when Amazon held its Prime Day.  US Sentiment more than expected this month as consumers felt more confident about current and future economic conditions, according to preliminary data released Friday by the University of Michigan.