Retail Sales Give Relief To Gold, Commodities Bounce

Gold and silver are recovering early losses as investors are digesting a weak retail sales report in the United States. Previously, Both commodities posted losses amid risk appetite.

Commodities are now trading back on the green as the United States reported this morning a weaker than expected Retail Sales report for February 2019.

Retail sales in the United States declined 0.2% in February, against the 0.2% increase expected by the market. January monthly data was revised up to a 0.7% monthly increase from 0.9% rise reported previously.

The number was worse if we take retail sales excluding autos as February reported a 0.4% decline in sales ex-autos. However, the offset could be weighed by the positive revision on January data as it was raised to 1.4% from the 0.9% posted initially.

The numbers hit market sentiment that was buoyant amid positive data in China and good news on the China-US trade talks.

In China, PMI manufacturing data returned to the expansionary territory as the Caixin Manufacturing PMI number rose to 50.8 in March from the 49.9 reported in February. Expectations were that report to stays unchanged.

NBS manufacturing data also returned to the expansionary territory with a reading of 50.5 in March from 49.2 in February. Market expected a number of 49.5.

Non-manufacturing PMI improved to 54.8 in March from the 54.3 reported in February in China.

Remember that any number above the 50 reading signals expansion in the industry, while a number below the 50 mark suggests contraction in the activity.

Kyle Rodda, analyst at IG Markets in Melbourne, commented to CNBC that “the most extreme part of the global growth slowdown panic has subsided a little bit and the Chinese data is responsible for that, but it is a single data point which should be backed by more data.”

Numbers in China added pressure to precious metals such as gold and silver. However, the retail sales in the United States pushed risk aversion back and lifted commodities up.

Gold recovers ground after US Retail Sales

Gold is trading positive after recovering all early losses amid a weak February retail sales data in the United States that hit market risk sentiment.

The metal is extending on Monday its bounce from 1,285 level performed on Friday. It now tests levels near to the 1,300 area.

XAU/USD is currently trading 0.25% positive on the day at 1,295. Next resistance is the 1,300 area, and above there, the pair will face the 20-day moving average at 1,302 first, and then the 50-day MA at 1,307.

To the downside, in the case gold fails to hold its bounce, it will test back the 1,385. Below, 1,280 is crucial support.

Silver extends bounce to 15.20

Silver is opening the week with gains as US data pushed risk sentiment down and lifted commodity prices.

XAG/USD is extending its bounce from 15.00 started on Friday. It now tests the 15.20 area.

Silver is currently trading 0.45% positive on the day with the pair pricing at 15.19. The pair has support at 15.00 and the 200-day moving average at 15.06.

To the upside, next resistances are at 15.30, where the 20-day moving average is, and at the 15.55 level, where the 50day moving average stands. Check also 15.54, March high.