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David Becker

Gold prices rebounded slightly making a higher high and a high low. The dollar continued to edge higher despite falling US yields as softer than expected UK data weighed on sterling and the euro. Commentary from the Federal Reserve Chair Gerome Powell kept markets range bound, which provided for a choppy gold market. US CPI came in stronger than expected, but this failed to buoy US yields. Prices were buoyed following news that the trade negotiations between the US and China have hit a snag.

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Technical Analysis

Gold prices rebounded slightly but remain range-bound. The 10-day moving average is poised to cross below the 10-day moving average which would show that a short term downtrend is in place. Short term resistance is seen near the 100-day moving average at 1,477, and then the 10-day moving average at 1,484. Support on the yellow metal is seen near the November lows at 1,445 and then the October lows at 1,426.  Short term momentum has turned positive. The fast stochastic generated a crossover buy signal. The current reading on the fast stochastic is 17 and moving higher but remain below the oversold trigger level. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average, crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices.


The UK Reports Soft CPI

The United Kingdom reported lower than expected October CPI data.  The headline number fell to 1.5% year over year compared to expectations that it would decline to 1.6% year over year.  CPIH inflation drop a tick to 1.6% year over year.  Both the headline CPI and the CPIH are at their lowest since late 2016.

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