Gold Price Prediction for August 25, 2016

Gold prices tumbled on Wednesday as traders sold the yellow metal ahead of the Yellen speech that is scheduled for Friday in Jackson hole Wyoming.  Traders are leery that the Fed Chair will give a hawkish speech setting the stage for a rate hike later in 2016.  Higher rates are generally good for the dollar and negative for gold, which trades like a currency relative to the U.S. dollar.

Prices tested resistance early near the 10-day moving average at 1,340, and then dropped 18 dollars per ounce. Support is seen near the August lows near 1,311.  Momentum has turned negative as the MACD (moving average convergence divergence) index generated a sell signal. This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses below the 9-day moving average of the spread.  The index is printing in the red with a downward sloping trajectory which points to lower prices.