Gold has been bearish since the first week of March after it failed to hold gains above $2,000. Since then, highs have been getting lower, and retraces higher have ended at moving averages on larger time-frame charts. Earlier today we were seeing the price slip lower, but about an hour ago XAU/USD jumped higher, as shown on the 15-minute chart below. We decided to open a sell signal here, as buyers were having trouble at moving averages again.

Gold 15 Minute Chart – Is the Retrace over?

XAU/USD finding it difficult at the 50 SMA

General Motors shares were halted ahead of the news but there’s no big surprise in the release. It says that the company had about 95,000 vehicles in inventory that were manufactured without certain components due to supply chain issues, including semiconductors. The company said it expects all the vehicles to be sold before year-end and reaffirmed its guidance.

I wonder how closely automotive manufacturers and dealers are watching the broader retail space and the bullwhip effect there where they’re now stuck with excess inventory. Given that it’s largely a vertically-integrated industry with long lead times, they should be able to manage it well but sales are also declining rapidly so by this time next year we could be in a situation where companies are slowing production and cutting prices. That’s another reason to worry that the Fed is overdoing it.

The company said sales were down 15% YoY with 582,401 sold in the US. The second quarter SAAR was an estimated 13.4 million light vehicles compared to 17 million a year ago. Slowing sales at the moment in autos is well-known, so that’s not a big surprise but shares are down 2% premarket after resuming trading.

Gold XAU Live Chart