Gold Price Prediction – Gold Consolidate Following No Confidence Vote

Gold prices moved sideways drifting slightly lower on Thursday as the dollar consolidate.  The stronger than expected US jobless claims data, buoyed US yields slightly generating a minor headwind for the yellow metal. Volatility is low, despite geo-politics in both the US and UK, which saw PM May survive a no confidence vote.

Technical Analysis

Gold prices continued to move sideways. And remains range bound forming a bull flag continuation pattern that is a pause that refreshes higher. Short-term resistance is seen near the January 2019 highs at 1,298. Additional resistance is the June 2018 highs at 1,310.  Support on the yellow metal is seen near the 20-day moving average at 1,279. Medium term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). Short term momentum is neutral. The fast stochastic is printing a reading of 75, which is below the overbought trigger level.

Jobless Claims Dropped More than Expected

US initial jobless claims decreased 3,000 to 213,000 for the week ended Jan. 12, according to the Labor Department. Expectations were for claims to rise to 220,000 in the latest week. The four-week moving average of initial claims, slipped 1,000 to 220,750 last week.

Prime Minister May Survived a No Confidence Vote, Now What?

Prime Minister May survived a no confidence by 19-votes after the historic defeat of the Withdrawal Bill.  She made a statement and several opposition party leaders and expressed disappointment that Corbyn did not participate.  The Labour leader demanded that May rule out a Brexit with no-agreement.  She cannot do that formally without undermining what is left of the UK’s negotiating position with the EC.