Gold Price Prediction – Gold Drops as the Dollar Gains TractionGold drops following Mexican trade deal
Gold prices tumbled lower dropping nearly 1%, as the dollar moved higher. President Trump made a guest phone appearance on CNBC on Monday, discussing his trade deal with Mexico. Trump also continued to praise the use of tariffs as a trade tool and a punishment mechanism. He still does not seem to realize that a tariff is a tax on the US consumer.
Gold prices reversed course, moving lower as the dollar gained some traction. Prices are poised to test support near the 10-day moving average at 1,313. Resistance is seen near the June highs at 1,348. The 10-day moving average recently crossed above the 50-day moving average reflecting that a short-term uptrend remains in place. Prices remain overbought. The fast stochastic generated a crossover sell signal in overbought territory. The current reading on the fast stochastic is 84, above the overbought trigger level of 80 which could foreshadow a correction. The RSI, moved back below the overbought trigger level of 70 which reflects accelerating negative momentum. Medium term upward momentum is slowing. The MACD (moving average convergerce divergence) histogram is printing in the black with a declining trajectory which points to consolidation.
Trump Confirms Further Tariff Treats
President Donald Trump confirmed on Monday that additional tariffs on Chinese goods will be levied if Chinese President Xi Jinping does not attend this month’s G-20 meeting. This came on a surprise phone interview on CNBC. The president previously threatened to put levies on another $300 billion in Chinese goods if a trade agreement is not reached soon. The Trump administration increased tariffs last month on $200 billion worth of goods the U.S. imports from China. The Trump administration decided this weekend that they would not place tariffs on Mexico. They appartely reached a deal. Over the weekend the NY Times reported that the deal that was reached was essential the same deal that was reached between the two countries three months ago.