Gold Price Prediction – Gold Forms Doji Day Barely Moving Despite Selloff in the Dollar

Gold prices rallied but were capped by resistance, and failed to break out to higher levels. This comes despite a drop in the US dollar. A rally in riskier assets spurred on by President Trump’s extension of the deadline for higher tariffs. Additionally, the possibility of a Second UK referendum leads to a rally in sterling which also weighed on the greenback, paving the way for higher gold prices.

Technical Analysis

Gold prices were nearly unchanged on Monday, forming a dohi day after initially attempting to move higher but failing near resistance at the 5-day moving average at 1,331. Support on the yellow metal is seen near the 20-day moving average at 1,318. Prices are grinding in an upward trend and taking their cues from the dollar. Short-term momentum is negative as the fast stochastic recently generated a crossover sell signal. The current reading of the fast stochastic is 53, which is in the middle of the neutral range which reflects consolidation. Medium term momentum is flat as the MACD (moving average convergence divergence) histogram is printing near the zero-index level with a flat trajectory. The MACD line is poised to generate a crossover sell signal, but the trajectory of the downward movement is sideways which reflects consolidation.

President Trump Extends Deadline for Tariffs

President Trump said that the March 1 deadline for trade talks will be extended.  He did not say how long or to what data but he said that substantial progress in negotiations between the two sides as the reason for the extension.  This allowed riskier assets to rally, but barely. Treasury Secretary Mnuchin said that Trump and Xi are likely to meet in late March, to sign off on a final deal.  Markets liked the delay, with global equity markets rallying.  This is the expected knee-jerk reaction, which has been buoyed by the Shanghai market.