Gold Price Prediction for February 13, 2018

Gold prices rebounded on Monday but remain rangebound caught between the 50-day moving average which is support near 1,305, and the 10-day moving average which is resistance seen near 1,331.  Momentum as reflected by the MACD (moving average convergence divergence) histogram is negative as the histogram prints in the red with a downward sloping trajectory which points to lower prices.  The fast stochastic on the other hand has bounced back into neutral territory which generating a crossover buy signal which points to higher prices for the yellow metal.

More Volatility is Likely Ahead

Looking ahead, input from around the globe should be mixed this week, with stock markets overseas taking their cue from a suddenly reflexive Wall Street. Investors will be pondering whether this is a healthy garden variety 10% correction, or something more onerous and self-sustaining in the 20-30% range, or worse. Sage advice has been that solid fundamentals in terms of corporate earnings and improving global activity will provide a backstop, but “past performance does not guarantee future returns” and falling knife catchers could be more than a little leery if financial conditions tighten up sharply after a historic bull run. Indeed, the worst case scenario would be for stocks and bonds to fall simultaneously, which could be problematic for risk parity hedgers and others of their ilk as leverage is wrung out of the markets. For now, the start of Lunar New Year holidays in Asia next week could provide cover for some calm.

U.S. Calendar Highlights Inflation and Retail Sales

U.S. economic calendar starts out at a snail’s pace, with the Treasury budget forecast to post a $47 billion surplus for January vs -$23.2 billion. The NFIB small business optimism index  will provide the main entertainment. MBA mortgage market indices are due, along with a potentially key update on January CPI, which may increase 0.3% headline and just 0.2% core, leaving core year over year at 1.6%, down from 1.8%. Also due is January retail sales, forecast to rise 0.2% headline and 0.3% ex-auto, while business inventories are seen rising 0.2% in December vs 0.4%.