Gold Price Prediction – Gold Eases as the Dollar Rebounds

Gold prices eased slightly on Friday, as the dollar gained traction. This came despite a softer than expected Durable goods orders report that was expected to rebound sharply following a decline in October. The risk of a partial US government shutdown help keep prices buoyed as gold is viewed as a safe-haven.

Technical Analysis

Gold prices eased on Friday as the dollar gained traction and yields moved higher. Prices formed an inside day which is a lower high and a higher low which reflects indecision and consolidation. Prices remain above the recent breakout level at 1,250 which is seen as short-term support. Additional support is seen near the 20-day moving average at 1,237. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Prices have moved out of overbought territory and are printing a reading of 71, below the overbought trigger level of 80. The trend remains upward sloping as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory.

Durable goods orders rose by 0.8% in November according to a report from the Commerce Department said Friday. Expectations were for a rebound of 2%. This followed a sharp fall of 4.3% in October when orders for commercial and military aircraft plunged. Orders in November, excluding transportation, dropped 0.3%. Business spending plans declined 0.6% .

A Change of a Partial Government Shutdown is elevated

The risk of a partial government shutdown is elevated, and a deal between congress and the president must be reached by mid-night on Friday. The Senate approved a stopgap bill on Wednesday that would keep the government going. This was rejected by the President as it did not have a 5-billion allocation for boarder security. The President seemed to walk back his demand for a wall early in the week, but as conservative pressure mounted the President seemed to change his tune. Without 60-votes in the senate, the House bill is doomed to fail.