Be Watchful Ahead of U.S. Session, Gold Likely to Give $15+ Volatility; May 14, 2021

U.S. Retail Sales & Industrial Production Results

Today’s U.S. session will remain important as U.S. has scheduled to release many key economic data at different time intervals.

Retail Sales & Core Retail Sales Results (1230 GMT/1800 IST)

It’s the primary gauge of consumer spending, which accounts for the majority of overall economic activity. Automobile sales account for about 20% of Retail Sales, but they tend to be very volatile and distort the underlying trend. The Core data is therefore thought to be a better gauge of spending trends.

Industrial Production and Capacity Utilization Rate (1315 GMT/1845 IST)

It’s a leading indicator of economic health – production reacts quickly to ups and downs in the business cycle and is correlated with consumer conditions such as employment levels and earnings. On the other side, Capacity utilization rate is a leading indicator of consumer inflation – when producers are nearing full capacity they respond by raising prices, and the higher costs are usually passed on to the consumer.

Let’s see how Gold has reacted during the previous data release:

April 15:

March 16:

Prelim UoM Consumer Sentiment (1400 GMT/1930 IST)

Financial Confidence is a leading indicator of Consumer spending, which accounts for a majority of overall economic activity. This data is derived via a survey of about 500 consumers which asks respondents to rate the relative level of current and future economic conditions. There are 2 versions of this data released 14 days apart – Preliminary and Revised. The Preliminary release is the earlier and thus tends to have the most impact.

Let’s see how Gold has reacted during the past data release:

April 16:

March 12:

Technical View:

XAU/USD: Gold remains volatile ahead of U.S. Key Economic Indicators. The pair made intraday high at $1,837 and low at $1,819 mark. A day chart and H1 chart with triple EMA suggest bullish trend for the time being. A sustained close above $1,840 on H1 chart test key resistances. Alternatively, reversal from here will drag the parity down below $1,820 mark.

Key Resistances: $1,838, $1,842, $1,848, $1,852, $1,856

Key Supports: $1,822, $1,815, $1,808, $1,802, $1,796

Take a look and do trade wisely!
Good Luck