Gold Price Prediction – Gold Rallies as Dollar Slips and Momentum Turns Positive

Gold prices moved higher on Tuesday, pushing through short-term resistance and poised to test key resistance. The dollar continued to ease on Tuesday paving the way for higher gold prices. The White House moved closer to installing tariffs on 11 billion of imports from the EU, while the US and Mexico are at odds, which is helping to buoy the safe haven status of gold.

Technical Analysis

Gold prices continued to grind higher on Tuesday, but continues to form a topping pattern. Resitsance is seen near the 50-day moving average at 1,307. Support is seen near the 10-day moving average at 1,294. Momentum has turned positive as 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 is printing in the black with an upward sloping trajectory which points to higher prices and accelerating positive momentum. The fast stochastic continues to move higher, after recently generating a crossover buy signal in oversold territory which reflects accelerating positive momentum.

The White House is moving close to installing $11 billion in imports on the European Union. This comes following continued subsidies by the EU for European aircraft manufacturer Airbus. The US has been in litigation at the World Trade Organization over Airbus subsidies since 2004. A increase in subsidies will generate additional headwinds for both the US and European economies and possibly benefit gold prices. The US and Mexico are at Odds. Tensions are rising as both sides are getting agitated by the border situation. Trump has threatened tariffs on Mexican autos.  Reports also suggest that the new US/Mexican/Canada deal is in danger of not passing the Democrat-controlled House.  Trump has threatened numerous times to shut the border, unless Mexico stops sending immigrants who are seeking asylum.