Gold Price Prediction – Gold prices hit their first weekly gains since mid-April amid a softer dollar 

Key Insights

• Gold prices traded flat but began to capitalize on falling yields.
• Investors fear recession among weaker economic data.
• Treasury yields continued to face downward pressure.

Gold prices made gains this week for the first time since mid-April. Prices began to capitalize on the pullback in yields and the softening dollar. The dollar is headed for its worst week since mid-February.  

Benchmark yields moved lower as investors amid risk-off sentiment. The ten-year yield lowered by 2 basis points today. Stocks faced declines amid investors’ worries over a potential recession. 

The economic calendar was light on Friday. However, investors’ fears grew about slowing economic growth and recession, leading to gains in gold as a safe haven for investors. Inflation concerns weighed on earnings. High prices are deterring consumer spending and leading to slower growth. 

The softening dollar and increasing gold prices signal investors’ fears about the direction of the market. The dollar was lifted amid geopolitical uncertainty as a safe haven, but treasury yields adjusting for inflation led to weakness in the dollar.

Technical Analysis

Gold prices posted slight losses on Friday but made gains for the week on weak US economic data this week. Gold prices edged above the 200-day moving average of 1839 to end the week, facing bullish momentum.

Support is seen near the 200-day moving average near 1839. Resistance is seen near the May 12th high of 1858.

Short-term momentum is positive as the Fast Stochastic might generate a crossover buy signal. Prices are no longer oversold as the fast stochastic prints a reading of 43.87, well above the oversold trigger level of 20. 

Medium-term momentum turns positive as the MACD might generate a crossover buy signal. This occurs as the 12-day moving average minus the 26-day moving average crosses below the 9-day moving average of the MACD line.

The MACD (moving average convergence divergence) histogram has a negative trajectory that points to lower prices.