Gold Price Prediction – Gold Hits Fresh 7-Year Highs

Gold prices broke out as the 10-year yield tumbled to make fresh lows. The 10-year yield hit a yield of .897, as investors baked in a 50-basis point interest rate cut when the Fed meets again in 2-weeks. This follows the emergency interest rate cut the Fed announced on Tuesday, which cut 50-basis points from the Fed Fund rate. The dollar continued to trend lower, breaking down and poised to test the 2020 lows. With gold prices in dollar and rates moved down, the safe-haven status of gold is gaining traction.

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Gold prices broke out on Thursday, rising nearly 2% and up more than 5% for the week. The yellow metal settled at a 7-year high. Prices are poised to test the February intraday highs at 1,690. Short term support is seen near the 10-day moving average at 1,634. Additional support is seen near the 50-day moving average at 1,577.  Medium-term momentum has turned positive. The MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram also generated a crossover buy signal, crossing through the zero-index level. The index has an upward sloping trajectory which points to accelerating positive momentum.

The fast stochastic also generated a crossover buy signal which reflects accelerating positive momentum. Prices can continue to rally as the fast stochastic is printing a reading of 67 short of the overbought trigger level of 80.