Gold Price Prediction for February 23, 2018

Gold prices rebounded from session lows bouncing at support near an upward sloping trend line at 1,320.  Resistance on the yellow metal is seen near the 10-day moving average at 1,337. Momentum is negative as the MACD (moving average convergence divergence) index is printing in the red with a downward sloping trajectory which points to lower prices. On the other hand the fast stochastic generated a crossover buy signal which could see a rebound in prices.

U.S. leading index rose

U.S. leading index rose 1.0% to 108.1 in January, a new record high after rising 0.6% to 107.0 in December. And aside from the 1.4% surge in October, this is the largest gain since March 2014. The last time the index posted a decline was May 2016. Eight of the ten components contributed positively, led by building permits and new orders. Two components, consumer confidence and the workweek, were unchanged.

U.S. initial jobless claims declined

U.S. initial jobless claims declined 7k to 222k in February 17 week, after rising 6k to 229k which was revised from 230k in the prior week. This brought the 4-week moving average to 226k from 228.25k which was revised from 228.5k. Continuing claims dropped 73k to 1,875k in the February 10 week, after rising 21k to 1,948k previously which was revised form 1,942k. Six states and Puerto Rico estimated claims. This week’s initial claims number is important as it coincides with the BLS survey week.

German Feb Ifo plunged

German Feb Ifo plunged to 115.4 from 117.6. This is a much sharper correction than anticipated and in fact the lowest reading since September last year, when the headline index also stood at 115.4. The breakdown showed the expectations index correcting to 105.4 from 108.3 in January, while the current conditions indicator declined to 126.3 from 127.8 in the previous month. Weak readings across the board then, which tie in with the disappointing PMI numbers yesterday.