Gold Price Prediction – Gold prices rallied as the dollar faced weakness

Key Insights

• Gold prices traded higher amid investors’ inflation concerns.
• Fed speak and first-quarter GDP will signal economic conditions.
• Treasury yields rise ahead of Fed speak. 

Gold prices move higher as the dollar starts off the week on a softer note. The dollar faced downward pressure amid slower growth prospects and possible movement toward recession. Benchmark yields rose as equities rallied today. The ten-year yield increased by 3 basis points today

The economic calendar was light on Monday. Focus remains on Fed Chair Powell’s remarks tomorrow and key economic data including PCI and first-quarter GDP released this week. Investors remain concerned about potential recession and slowing economic growth.

Technical Analysis

Gold prices pulled back from session highs but are still higher and might be headed to the 1860s. Key economic data this week could signal slower economic growth and could be a tailwind for gold.

Gold prices remained above the 200-day moving average of 1839 to start 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 generated a crossover buy signal. Prices are no longer oversold as the fast stochastic prints a reading of 54.58, 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.