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David Becker
Gold Recovers Three Days of Losses Amid Trade Woes and FOMC Minutes
Gold Recovers Three Days of Losses Amid Trade Woes and FOMC Minutes

Gold prices continued to rembound but remain range bound.  Safe haven flows returned to the yellow metal ahead of the long US holiday weekend. News that UK PM Theresa May is planning to step down in early June, gave a bid to gold prices. The dollar was also under pressure although US yields were staple which also paved the way for higher gold prices. Weaker than expected Durable Goods Orders will likely weigh on the greenback.

Technical Analysis

Gold prices continued to move higher on Friday and continued to rebound into the close the trading session. Resistance is seen near the 10-day moving average at 1,284, and then the 50-day moving average at 1,289. Meditum term 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 also generated a crossover buy signal as it closed through the zero index level which reflects accelerating positive momentum. The fast stochastic has also generated a crossover buy signal which reflects short term accelerating positive momentum. The current reading of 33 on the fast stochastic is on the lower end of the neutral range.


Durable Goods Orders Drop

Durable goods, orders tumbled 2.1% in April after increasing 1.7% in the prior month. Orders for transportation equipment dropped 5.9% after rising by 5.9% in March. Orders for motor vehicles and parts decreased by 3.4% last month, the most since May 2018. Orders for non-defense aircraft plunged 25.1% after rising 7.8% in March. Boeing reported on its website that it had only four aircraft orders in April, down from 44 in March. Orders for machinery edged up 0.1% after dropping 2.0% in March. Orders for computers and electronic products fell 0.4%.

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