The gold-price of the U.S. dollar had been rising all week. But today, April U.S. retail sales data was finally released. Retail sales increased by 0.4% as opposed to the 0.1% of the previous month. This shows that the data from March was mostly an anomaly.
You might have expected the dollar to rise because of this good news. But instead, it sold off as gold traders took profits.
However, after falling for most of the day, it ran into the 50 moving average on the four-hour charts and bounced back up.
Here’s where it stands now.
Gold-price of the U.S. dollar.
On a daily chart, you can’t even see the short bounce upward that came at the end of the trading day. Anyway, there are two things that stick out about this chart.
First, MACD and RSI are both showing strong upward momentum. Second, the price is above the 10-day EMA. So it’s likely to go down in the very near future.
When it falls to the 10 EMA, this will be a good opportunity to short gold/go long the dollar.
But where to take profits?
The price has been testing the top of this range at around 0.83 mAU/dollar (0.00083 troy ounces/dollar) since early 2016. It attempted to break through in both April and June, but failed both times. Then it tried again and succeeded after Trump’s election in November, only to return back as Le Pen’s chances of becoming President of France heated up.
After Le Pen lost, the world’s reserve currency is once again gaining ground as hope and optimism fill the hearts of investors. However, given the fact that the dollar has failed to break this line three out of the four times, this is probably a good place to take profits…if it gets there.
Gold-price of U.S. stocks.
Despite this rise in the dollar, U.S. stocks failed to break through the line of resistance they’ve been hitting since 2015.
I would not want to be buying stocks right now. They will either fall here or break through. If they break through, there will be very little downside risk afterwards. I would want to buy at that point. But IMO it’s too risky to do so now.
Gold-price of U.S. bonds.
Bonds appear to be returning to their previous trading range after having punched through its floor back in February. If you look at this on a longer time-frame, bonds appear to have hit a long-term area of support that goes all the way back to October of 2015.
See last week’s post for more detail.
If this bigger, long-term range is holding, we can expect bonds to go much higher. A share of the TLT bond fund may go as high as 105 mAU (0.105 troy ounces).
Unemployment claims are coming out on Thursday. And that should provide some volatility.
But other than that, I’m expecting a slow grind up for bonds and the dollar and down for stocks.
Check back next week.
I use GoldMoney to buy my gold at half a percent over spot.