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Gold Price Prediction – Gold Rebounds on Soft Manufacturing Output

By:
David Becker
Published: Mar 15, 2019, 18:47 UTC

Gold is forming a topping pattern

Comex Gold

Gold prices rebounded on Friday but remain rangebound. Offsetting data showed that manufacturing output in the US declined while the number of jobs available increased. Yields moved sideways while the dollar moved lower paving the way for higher gold prices. Gold prices finished the week up 0.3%. Gold prices gave back most of the gains made early in the week on Thursday. With Brexit likely put off until the end of the month, they geopolitical issues have been moved to the sidelines. The dollar is also having a difficult time gaining traction, as the Fed is now on hold along with other central banks. The Bank of Japan finished its two-day meeting on Friday. No change in policy was announced. There were to dissents that believe that the BoJ should be more accommodative.

Technical Analysis

Gold prices rebounded off support level near the 10-day moving average at 1,294. Resistance is seen near the 50-day moving average at 1,303. Prices are sandwich between the 2-moving averages. Prices also appear to be forming a topping pattern. This could be the second shoulder of a head and shoulder reversal pattern. Momentum has turned neutral. The MACD (moving average convergence divergence) histogram print in the red with a rising trajectory which points to consolidation.

Manufacturing Output Declined in February

US Industrial Production declined for the second month in a rose in February. The Federal Reserve reported that manufacturing production dropped 0.4% last month, held down by declines in the output of motor vehicles. Data for January was revised up to show output at factories falling 0.5% instead of slumping 0.9% as previously reported. Expectations were for manufacturing output to rise by 0.3% in February. Utilization at factories increased by 1% in February year over year. Cars and parts output declined by 0.1% following a drop of 7.6% in January. Ex-autos output fell by 0.4% in February.

About the Author

David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.

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