Gold Price Prediction – Gold Slips as Prices Remain Range bound

Gold prices moved lower but bounced at support levels, despite higher US yields. Yields had dropped in the wake of the Fed’s monetary policy decision. The dollar continued to move sideways gaining some traction, but not climbing even though yields moved rapidly. European PMI data came in as expected along with the UK PMI report.  The Bank of England left interest rates unchanged but Central bank chair Carney said that rates mighty have to accelerate more than expected if the economy begins to accelerate.

Technical Analysis

Gold prices moved sideways slipping slightly but holding up above support near 1,263. Resistance on the yellow metal is seen near the 10-day moving average at 1,271. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. This occurred in the middle of the neutral range which likely means that this is still a consolidation pattern. The current reading on the fast stochastic is 26, which is in the lower portion of the neutral range. The MACD (moving average convergence index) moved sideways and after generating a crossover buy signal it made a crossover sell signal. The MACD histogram generated a crossover buy signal and is printing just above the zero index level.

The BoE Left Rates Unchanged, as widely expected

On Wednesday the UK manufacturing PMI came in as expected at 53.1.  In the US, the The Institute for Supply Management manufacturing index slipped to 52.8 in April from 55.3% in March. Expectations were for the PMI number to comes in at 54.7. Mr. Carney said, that if something broadly like this forecast comes to pass, it will require interest rate increases over that period and it will require more, and more frequent interest rate increase. Final eurozone PMI manufacturing data was reported on Thursday.  Most countries saw a minor uptick. April UK construction PMI came in at 50.5 versus expectations of 50.3.