Gold has made quite a strong reversal since early this month when it was trading below $1,620. XAU/USD formed a decent support zone around $1,615 where it bounced from and since then Gold hasn’t looked back. The sentiment improved after US consumer inflation CPI come out softer than expected, falling below 8%, releasing the FED from the pressure to keep raising rates in a hectic manner.

Last week producer inflation PPI also slowed in the US, indicating that consumer inflation will probably slow further in the coming months, so the USD went through another bearish phase and the sentiment improved further for risk assets. Some Gold continues to remain bullish, with the 50 SMA (yellow) acting as support on the H1 chart.

Today the US retail sales report which is displayed below came in stronger than expected for October, which sent the USD higher and risk assets retreating lower. But, it seems like the 50 SMA is holding as support again, so we decided to open a buy Gold signal above this moving average like we have done in previous days and now the price is starting to bounce up again.

US October Retail Sales

• October retail sales 1.3% vs. 1.0% expected
• September sales were 0.0%
• Retail sales ex auto 1.3% vs. 0.4% expected (prior 0.1%)
• Retail sales ex auto/Gas 0.9% vs. 0.2% expected (prior revised higher to 0.6% vs 0.4%)
• Control group 0.7% vs. 0.3% expected
• Prior control group 0.4% revised higher to 0.6%
• Retail sales YoY and adjusted for inflation 9.34% vs 8.23% last month
• Furniture +1.1%
• Autos +1.3%
• Gas +4.1%

The retail sales are impressive with the current month higher than expectations and revisions in the Ex auto and gas and the control group also higher. The number is positive on a inflation-adjusted basis as well. This report will keep the Fed on target for more hikes as they continue their playbook to more restrictive policy. Stocks are fairly steady with the Down -26 points, the Nasdaq down -22 and the S&P down -6 points.