Gold Price Prediction – Gold Forms Doji Day and Reversal Pattern

Gold prices whipsawed initially moving lower in the wake of the stronger than expected US payroll report. Gold continues to benefit from an uncertain Brexit in the UK but has been hampered by weak data in the EU. Yields initially move higher, with the 10-year yield moving up to a 2-week high following the US payroll report, but yield slid throughout the North American trading session, allowing gold prices to remain buoyed.

Technical Analysis

Gold prices were nearly unchanged mid-day in the US, after experiencing whipsaw price action. Prices had formed a doji day which is a scenario where the open and the close are the same which reflects indecision. Gold appears to also be forming a head and shoulder reversal pattern which is a topping pattern. Support is seen near an upward sloping trend line that comes in near 1,285. Resistance is seen near the 10-day moving average at 1,297. The 10-day moving average recently crossed below the 50-day moving average which shows that a short-term downtrend is now in place. Medium term momentum is negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices and accelerating negative momentum. The fast stochastic has generate a crossover buy signal in oversold territory which reflects accelerating positive momentum.

Germany Reports Solid IP

It appears that Prime Minister May has asked the EU for a withdrawal delay until June 30. The EU has signaled that it will consider a longer extension that would avoid a no-deal Brexit. May will need to convince the EU that she has a chance at getting a deal completed, which is easier said than done. Germany reported solid Industrial production data following very soft factor order that were released earlier in the week.  Industrial production rose 0.7% month over month in February compared to expectations that it would rise by 0.5%.