Gold Price Prediction for August 18, 2017

Gold prices moved higher but were unable to push above trend line resistance, despite softer than expected inflation and a dovish ECB and Fed.  Gold is poised to test the August highs at 1,292, and then the August highs at 1,296.  Support on the yellow metal is seen near the 10-day moving average at 1,274. Momentum is neutral as the MACD (moving average convergence divergence) histogram prints in the black with a flat trajectory which reflects consolidation.

Eurozone Inflation Was Soft

Eurozone July HICP confirmed at 1.3% year over year, slightly less than expected and unchanged from June. Core inflation was confirmed at 1.2% year over year, up from 1.1% year over year in June. Headline rates remain far below the ECB’s upper limit for price stability and with the EUR turning out stronger than the ECB’s June projections assumed, the chances are that the ECB will once again have to revise down its inflation forecast with the September updated. With geopolitical risks as well as Brexit still hanging over the outlook the data will do little to convince Draghi to commit too early to a full phasing out of QE.