The markets relinquished short-term gains on Friday following the soft retail sales and inflation data and should be poised to edge lower this afternoon as investors re-evaluate the likelihood of an interest rate increase in June. With an air of anxiety suffocating participants who seek risk, and soft economic data from the US and China weighing on sentiment, the “Sell in May and go away” strategy may become a popular choice.
Gold has also been capped by its technically-important 200-day moving average, which comes in at just shy of $1,259 per ounce. If this level were to break then we could see the start of a move towards the next potential resistance at $1,265, followed by the next bullish objective at $1,269/$1,270, which corresponds with the 61.8% Fibonacci retracement level against last year’s high.
Stock markets were explosively volatile this week, with most areas sprinting into record levels as the mixture of stabilizing oil prices and improving economic data across the globe boosted risk appetite.