Gold Price Prediction – Gold Drops on Robust Consumer Sentiment

Gold prices dipped on Friday, and continued to slide toward support levels. Stronger than expected confidence levels, helped buoy US yields which bolstered the US dollar paving the way for lower gold prices. Sentiment relative to trade remained volatile, as headlines over the US and China trade spat kept markets on edge. It appears that the markets are pricing in tariffs for the long haul. The US and Canada announced that they would both lift steel and aluminum tariffs. This gave some riskier assets a boost.

Technical Analysis

Gold prices moved lower and held just above support near an upward sloping trend line that comes in near 1,273. A break would test the April lows near 1,265. Short term momentum has turned negative as the fast stochastic recently generated a crossover sell signal. The stochastic is accelerating away from the signal line which also reflects accelerating negative short-term momentum. The current reading of 53 is in the middle of the neutral range and reflects consolidation. Medium term momentum is turning negative as the MACD (moving average convergence divergence) index is poised to generate a crossover sell signal. The MACD histogram is printing in the black with a declining trajectory which reflects consolidation.

Consumer Sentiment Beats Expectations

Consumer sentiment surged its highest level in 15 years in early May. The University of Michigan’s preliminary consumer sentiment index rose to 102.4, up from 97.2 in April beating expectations of 97.5. The period measured generally fell during a period prior to the latest US-China trade spat, earlier in May. This will likely change following the increase in US trade tariffs on Chinese goods and their reciprocal actions.