Gold Price Prediction for February 6, 2018

Gold prices are likely to remain shaky as the new week begins with buyers waiting for the dust to settle before stepping back in. Though the “Nunes memo” wasn’t the catalyst for a rally in gold prices, it did keep potential sellers away. And Washington is likely to become more contentious near term, just when compromise will be needed to prevent another government shutdown with the current continuing resolute set to expire late in the week. Fedspeak ramps back up this week and will be key with the markets now seeing the risk of 4 tightenings this year.

Technicals

Gold prices rebounded on Monday after nearly falling through short term support near 1,334.  Target support on the yellow metal is seen near the 50-day moving average at 1,301.  Resistance is seen enart eh 10-day moving average at 1,343.  Additional resistance is seen near the January highs at 1,365.  Momentum remains negative as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory which points to lower prices for the yellow metal.  The RSI (relative strength index) moved sideways on Monday after tumbling from overbought territory in late January.

Dallas Fed hawk Kaplan says inflation pressure will be seen by the U.S. economy this year

Dallas Fed hawk Kaplan says inflation pressure will be seen by the U.S. economy this year, which should keep the Fed removing accommodation gradually but deliberately. The vote still sounds patiently hawkish, but the bond market has already gotten that message and Wall Street is catching down. SF Fed’s centrist Williams will be speaking after the close on the economy.

Yellen Says Stocks are Elevated

Ex-Fed Chair Yellen didn’t want to say stock prices are “too high,” but in a CBS News interview taped on Friday said, “But I do want to say high. Price-earnings ratios are near the high end of their historical ranges. If you look at commercial real estate prices, they are quite high relative to rents. Now, is that a bubble or is too high: And there it’s very hard to tell. But it is a source of some concern that asset valuations are so high.” She also admitted she was disappointed at not being reappointed Fed chair. Meanwhile, in one of her last actions, the Fed announced sanctions on Wells Fargo Bank which will be prohibited from increasing its assets above the 2017 total of $1.95 trillion.