Gold prices moved higher on Friday as concerns over the coronavirus cases, and how it might erode global growth helped increase the risk premium in the capital markets. Gold which is considered a safe haven asset moved higher. Bonds rallied weighing in US yields which capped the upside in the US dollar. US retail sales came out in line with expectations, but December sales were revised slightly lower.
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Gold prices moved higher pushing toward resistance near the February highs at 1,592. Additional resistance is seen near the January highs at 1,611. Shor term support is seen near the 10-day moving average at 1,568. Target support is seen near the 50-day moving average at 1,535.
Short term momentum has turned positive as the fast stochastic generated a crossover buy signal and accelerated higher. The movement is choppy which likely means that gold is going to consolidate. The RSI turned higher and is forming a continuation pattern which points to accelerating positive momentum. The MACD histogram is printing in the red with a rising trajectory which also points to consolidation and sideways price action.
Retail Sales Rises
Headline retail sales rose 0.3% in January, in line with expectations. Data for December was revised down to show retail sales gaining 0.2% instead of climbing 0.3% as previously reported. Auto sales rebounded 0.2% after slumping 1.7% in December. Sales at building material stores jumped 2.1%, the most since last August. Retail sales excluding automobiles, gasoline, building materials and food services were unchanged last month. Data for December was revised down to show the so-called core retail sales rising 0.2% instead of jumping 0.5% as previously reported. Expectations were for core retail sales to rise 0.3% last month.The unchanged reading in core retail sales suggested consumer spending slowed further.
This article was originally posted on FX Empire
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