Gold Price Prediction – Gold Stabilizes But Momentum Remains Negative

Soft EU PMIs fail to weigh on gold prices
David Becker
Comex Gold

Gold prices consolidated on Thursday despite a rising dollar, which benefited from weaker than expected EU PMI number for April that was released on Thursday. US yields fell which helped the yellow metal remain stable. The trend continues to point to lower prices.

Technical Analysis

Gold prices formed a doji day were the open and close were at the same level. Resistance is seen near the former breakdown level which is an upward sloping trend line that comes in near 1,284. Additional resistdance is seen near the 10-day moving average at 1,289. Support is seen near an upward sloping trend line that comes in near 1,260. 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. The fast stochastic also generated a crossover sell signal, which points to accelerating negative moemtnum. The current reading on the fast stochastic is 6, which is below the oversold trigger level of 20, and could foreshadow a correction.

EU PMIs Come in Weaker than Expected

Eurozone preliminary PMI readings for April were reported, and they came in weaker than expected.  The composite reading declined to 51.3 versus expectations that it would come in at 51.8 expected.  Manufacturing PMI rose to 47.8 but was offset by a larger than expected drop in the services PMI to 52.5.  Looking at the country breakdown, Germany’s composite rose to 52.1 versus expectatinos of 51.7 due to a higher manufacturing PMI of 44.5 and a higher services PMI of 55.6.  Strong UK March retail sales were reported which initially buoyed the pound.  Both headline and ex-auto fuel were expected to fall -0.3% month over month.  The headline retail sales increased by 1.1% and ex-autos increased by  1.2%. They both were expected to decline by 0.3% month over month.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.