Gold Breaks Below the 50 SMA Trend Indicator, as US Economy Keeps Expanding
Skerdian Meta•Wednesday, November 17, 2021•2 min read
Gold turned quite bullish this month, increasing from $1,760s to $1.870s, as the US Congress passed the $1.2 trillion infrastructure bill. Safe havens, such as gold, benefit when there’s lots of cash lying around, which is keeping inflation surging in the US. The FED’s Bullard sounded worried about the inflation, which is above 5.5% now, and he wants the FED to taper at a faster pace, although he has always been a hawk. Now, GOLD has broken below the 20 SMA (gray) on the daily chart, which was keeping the trend bullish in the last two weeks.
Fed’s Bullard Speaking
- Core PCE is quite high
- Fed should take a more hawkish policy in the next couple of meetings
- Markets are past the taper tantrum. The Fed could move further faster
- Fed taper increased to $30 billion per month would open the door to rate increase end of Q1 2022
- Tacking hawkish Lee now could be an advantage by smoothing out the normalization process in doing less later
- Does not see neutral rates rising beyond pre-pandemic levels
- Even if inflation comes back down the Fed is in a good place for next year. Can keep rates lower
- Bullard has two hikes priced in for next year. Agrees with the market assessment
- Fed could move on rates before the taper concludes and could also allow for the runoff of the balance sheet after the taper
Bullard is one of the more hawkish members of the Federal Reserve.
US retail sales for October 2021
- Retail sales 1.7% versus 1.2% estimated
- October sales were 0.8%, revised up from 0.7%
- Core retail sales excluding auto 1.7% versus 1.0% estimated
- October was revised to 0.7% from 0.8%
- Retail sales control group 1.6% versus 0.9%.
- October control group 0.8% revised to 0.5%
- Retail sales excluding auto and gas 1.4% versus 0.5% last month (revised from 0.7%)
- Full Report (PDF)
Further details:
- Furniture 0.4% vs -1.1% last month.
- Electronics and appliances 3.8% vs -0.2% last month.
- Building materials 2.8% vs 0.2% last month.
- Food and beverage stores 0.9% vs 0.2% last month.
- Health and personal care stores -0.6% vs -1.0% last month.
- Sporting goods and hobbies 1.5% vs 4.5% last month.
- Gen. merchandise 0.8% vs 2.0% last month.
- Non-store (online) 4.0% vs -0.8% last month.
- Food services and drinking places 0.0% vs 0.4% last month.
The gain was the third month in a row. A solid report for retail sales.
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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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