Gold Price Prediction – Gold Rebounds as Brexit Vote Fails

Gold prices moved higher on Friday, buoyed by news that Lawmakers in the UK Parliament voted down PM Mays withdrawal bill for the third time. The markets were expected a vote that would allow the UK to extend the agreement with the EU until May 22. This was somewhat of a surprise.

Technical Analysis

Gold prices moved higher on Friday rebounding somewhat from Thursday route. Prices tumbled on Thursday as the dollar gained traction. Prices held above support near an upward sloping trend line that connects the low in January to the lows in February and comes in near 1,283. Resistance on the yellow metal is seen near the 50-day moving average at 1,307. The 10-day moving average has crossed below the 50-day moving average which means that a short-term down trend is now in place. Medium term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices and accelerating negative momentum.

Member of the UK parliament voted down the agreement PM May negotiated with the EU for Britain’s orderly departure by 344 votes to 286 on Friday. With every such rejection, Brexit outcomes that once seemed radical become more likely. These include another referendum to revoke the exit altogether, a general election or a sudden breakaway from the EU. The way things have been left, the UK will leave the bloc on April 12 without any agreement. Most lawmakers see it as more likely that the government will ask the EU to postpone Brexit again to avoid the expected widespread disruption.