Gold Price Prediction for December 21, 2016

Gold prices rebounded from session lows following a report that showed stronger than expected German inflation.  With the ECB extending its QE, rates are pushing up prices in Europe’s largest economy which could help buoy the yellow metal. Resistance is seen near the 10-day moving average  at 1,150, while support is seen near the December lows at 1,122.  The RSI (Relative strength index) remains in oversold territory below the 30-trigger level which could foreshadow a correction.

German PPI inflation jumped to 0.1% year over year, from -0.4% year over year in the previous month, higher than expected and finally back in positive territory. Nobody is talking of deflation risks anymore and in Germany at least, ECB rates are looking too low, for an economy that is growing at a relatively robust pace and where the labor market is looking increasingly tight.

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