Gold Price Prediction – Gold Rallies as Risk Off Trade Perpetuates
Gold price moved higher on Tuesday amidst a riskier asset selloff following confusion to what was agreed to by President Trump and President Xi. Yields moved lower which weighed on the US dollar paving the way for higher gold prices. Trump was quick to announce that the Chinese had 90-days to agree to some of the US’s demands which surprised the Chinese and sent riskier assets in to a tailspin.
Gold prices moved higher closing near the highs of the session and poised to test the October highs near 1,243. Support is seen near the 20-day moving average at 1,219 and then the 50-day moving average at 1,215. 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 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. The fast stochastic surged higher and is now printing a reading of 84, above the overbought trigger level of 80 which could foreshadow a correction.
Trump Announces 90-day Deadline
President Trump tweeted on Tuesday that unless extended, they will end 90 days from the date of our wonderful and very warm dinner with President Xi in Argentina. This weekend, the the two presidents and their negotiators worked toward a settlement of a trade dispute that has resulted in retaliatory tariffs and other geopolitical measures. At the meeting, Mr. Trump agreed to suspend a planned Jan. 1 increase in tariffs on $200 billion in Chinese goods to 25%, from 10%, as the two sides negotiate over Chinese economic policies. This was a surprise to Chinese officials have made no mention of any deadline, and were angered when told about the U.S. claims. The 90 days to which Mr. Trump referred began December. 1.