Gold Price Prediction – Prices Fall Ahead of Fed as Retail Sales Slides

Gold prices continued to decline and again bounced near support but settled lower. The dollar moved sideways along with the 10-year Treasury yield ahead of Wednesday’s Federal Reserve decision. U.S. Retail sales were weaker than expected but producer inflation surged. Producer prices rose at their fastest annual clip in nearly 11 years in May. As a result, all eyes will be on the Fed and how they handle the fact that inflation is accelerating.

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Technical analysis

Gold prices moved lower but settled off session lows. Support is seen near an upward sloping trend line that comes in near 1,855.  Short-term resistance is seen near the most recent trend breakdown at 1,872. Additional resistance is seen near the 10-day moving average at 1,885 Short-term momentum is negative as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned negative as  the MACD (moving average convergence divergence) as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a declining trajectory which points to lower prices.

Sales Unexpectedly Fell

U.S. Retail sales fell 1.3% last month. The April data was revised higher to show sales increasing 0.9% instead of being unchanged. Expectations had been for retail sales to decline by 0.8%. Retail sales surged 28.1% year over year.