Gold Price Prediction – Gold Rallies as US Yields Drop

Gold prices moved higher on Friday as the dollar eased, and US yields moved lower. This came despite a stronger than expected US Q1 GDP report, that was driven higher by rising exports. With Japanese markets closed for Super Golden Weak until May 6, the yen appreciated as Japanese banks purchased currency to handle liquidity issues.

Technical Analysis

Gold prices rallied on Friday climbing 0.7% and finishing the week up 0.8%. Prices are poised to test resistance near the 50-day moving average at 1,300, after slicing through prior resistance which now supports near the 10-day moving average at 1,278. Short-term momentum has turned positive as the fast stochastic recently generated a crossover buy signal. The fast stochastic is printing a reading of 29, but was down near 12, earlier this week which reflects accelerating positive momentum. Medium term momentum is poised to turn positive as the MACD (moving average convergence divergence) index is about to generate 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 red but is also poised to cross through the zero-index line which would reflect accelerating positive momentum.

US GDP Grew More than Expected

The commerce department on Friday reported that Q1 GDP grew more than expected to 3.2% year over year. Growth was driven by strong exports and declining imports. Exports to China, mainly in the form of agricultural products, surged higher which will likely fall off in Q2. This was a make of declining exports during the latter half of 2018. The positive news, follows Thursday’s larger than expected jobless claims report which showed the largest increase in more than 19-months.