Gold Price Prediction – Prices Fall on Dollar Gains

Gold prices eased on Tuesday, failing at key resistance. The move in the yellow metal lower was driven by gains in the greenback, despite weaker than expected U.S. retail sales. U.S. Yields moved lower, but the risk-off trade took the dollar higher, which weighed on the yellow metal. Homebuilder sentiment was also weaker than expected.

Technical analysis

Gold prices slipped on Tuesday failing to recapture resistance near the 20-day moving average at 1,778. Target support is seen near the March lows at 1,677. Short-term momentum has turned negative as the fast stochastic generated crossover sell signal.  Medium-term negative momentum shifted negatively as the MACD (moving average convergence divergence) index generated a crossover sell signal. This sell signal occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).

Retail Sales Miss

Retail sales for the month fell 1.1%, worse than the 0.3% decline expected and below the upwardly revised 0.7% increase in June. Excluding automobiles, sales declined 0.4%, according to Commerce Department. Most of the monthly decrease came from motor vehicles and parts dealers, which fell 3.9%. Online sales also posted a 3.1% drop.