Gold Price Prediction – Gold Prices Move Lower but Hold Above Support

David Becker
Published: Apr 23, 2019, 18:55 GMT+00:00

US Yields reverse allowing gold to remain buoyed

Comex Gold

Gold prices moved lower on Tuesday but settled off session highs as US yields reversed course after moving higher early in the trading session. The dollar moved higher against most major currencies attempting to close at a 2019 high but was unable to break out. Higher US yields and a stronger US dollar will pave the way for lower gold prices.

Technical Analysis

Gold prices moved lower rebounding from session lows, as the dollar lost traction during the North American trading session. Prices appeared to bounce ahead of support near an upward sloping trend line that comes in near 1,259. This is a key support level and a break down below this level would lead to a test of the 1,237 level. Resistance on the yellow metal is seen near the 10-day moving average at 1,285, which coincides with former support at 1,284. Negative momentum appears to be decelerating as the fast stochastic generated a crossover buy signal in oversold territory. The crossover with the fast-stochastic printing a reading of 10, which is below the oversold trigger level of 20, could foreshadow a correction. The MACD (moving average convergence divergence) histogram is printing in the red with a declining trajectory which points to accelerating negative medium-term momentum.

The US Dollar Fails to Break Out as US Yields Moderate

US yields moved lower as stock prices surged to near all-time highs on Tuesday. The rally in riskier assets put downward pressure yields which stock the dollar from breaking out. Since gold is priced in US dollars, it halted its downward decent. On Tuesday, following Monday’s softer than expected US existing home sales, the Commerce Department reported that new home sales increased more than expected. Monday’s softer than expected US existing home sales was dragged down by the lack of inventories on the lower end of the sales spectrum.

About the Author

David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.

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