Gold Price Prediction – Gold Forms Doji Day as Brexit Concerns Offset a Rising Dollar
Gold prices moved sideways on Tuesday forming a doji day, which signals indecision. Riskier assets gained traction, allowing US yields to move higher. UK Lawmakers reject a timetable for Brexit deal legislation, and this means that the UK government has lost control of the process. There might even be a general election by the end of the year. While lawmakers Tuesday endorsed Prime Minister Boris Johnson’s Brexit deal, the timeline was too quick. Johnson even threatened to pull the deal if lawmakers refused to fast-track the legislation. The dollar gained traction despite falling US yields.
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Gold prices moved sideways forming a doji day and is hovering above support near an upward sloping trend line that comes in near 1,478. Additional support is seen near the 100-day moving average at 1.457. Resistance is seen near the 10-day moving average at 1,490, and then a downward sloping trend line that comes in near 1,506. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. The fast stochastic is printing in the middle of the neutral range. Medium-term momentum is negative to neutral. The MACD histogram is printing in the red with a flat trajectory that points to consolidation.
Brexit Issues Remain Front and Center
With parliament saying that they need more time, the government will likely try for a general election. The Tore party has been trying to move in this direction This provides a huge amount of uncertainty within the markets, which is helping to buoy the yellow metal. The question will also be whether the EU will vote on an additional extension, to avoid a hard Brexit. Given their recent wiliness to negotiate, the EU is likely to allow a delay.