Gold Price Prediction – Gold Forms Bull Flag Pattern

Gold prices are forming a bull flag pattern which is a pause that refreshes higher. Prices were buoyed on Wednesday as the dollar fell against the Euro and US yields temporarily haltered their rise.  There was some positive news that came out of the US-China, negotiations on trade which was extended to an additional day which shows that each side is serious about getting a deal done.  Many believe that once a deal is completed riskier asset will slip, as traders take profits and sell on the news.

Technical Analysis

Gold prices moved higher and are forming a bull flag pattern. A breakout above the January highs  at 1,298 would be the refreshing of the flag, and points to higher prices. A close above that level would confirm the bull flag.  Additional resistance is then seen near the June 2018 highs at 1,310. Support on the yellow metal is seen near the 20-day moving average at 1,265. Additional support is seen near the 50-day moving average at 1,240. Short term momentum is flat but prices are overbought. The fast stochastic is printing a reading of 82, above the overbought trigger level of 80. The index has a flat trajectory after recent generating a cross over sell signal. The MACD histogram is printing in the black with a negative trajectory and poised to cross below the zero-index level which reflects accelerating negative momentum which points to lower prices for the yellow metal.

The dollar is starting to lose ground as it appears that many Fed members are now satisfied with 1-rate hike as their target forecast for the balance of 2019. This should take some of the headwinds away from stock prices, which will now climb the earnings and trade negotiations as the new walls of worry.  The dollar will also likely remain stable but could rise on another surge in jobs or fall if Europe and Asia stop underperforming.