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Gold Price Prediction – Gold Slips as Strong IP Lifts the Greenback

David Becker

Gold prices moved lower on Friday, dipped following a stronger than expected Industrial Production report which offset a weaker than expected rise in Retail Sales. Import prices also moved lower and saw the largest drop since 2016 which weighed on the yellow metal.

Technical Analysis

Gold prices continued to trade sideways moving lower on Friday and pushing through short term support near the 10-day moving average at 1,198, which is now seen as short term resistance. Additional support on the yellow metal is seen near the September lows at 1,195. Additional resistance is seen near the 50-day moving average at 1,210. Momentum is neutral as the MACD (moving average convergence divergence) histogram prints in the black with a flat trajectory which points to consolidation.


Retail Sales Grew Less than Expected

US Advanced retail sales increased by 0.1%E in August according to the Commerce Department.  Expectations were for an increase of 0.4%. Year over year retail sales increased by 6.6%. The disappointing climb was somewhat offset by an upward revision to the July figures which increased to 0.7% in July from 0.5% previously.  Excluding cars, sales were up 0.3% in August and excluding gasoline sales declined by 0.1%.

Prices Dropped

U.S. import prices dropped by 0.6% month over month which was the biggest drop in more than 18-months. The July figures were revised lower by the Labor Department. Import prices were previously reported to have been unchanged in July. Expectations were for import prices to dip by 0.2% in August. On a year over year basis. Import prices increased by 3.7%.

Industrial Production Surged

The Federal Reserve reported that US industrial production, grew 0.4% in August month over month. Expectations were for IP to increase by 0.3% in August. Robust 1.2% production growth in the utilities sector helped push last month’s overall output gain. Capacity utilization increased by 0.2% point to 78.1% in August. Economists had expected 78.2%.

This article was originally posted on FX Empire