Gold Price Prediction – Gold Surges as the Euro Rises

Gold prices surge as the dollar eases
David Becker
Gold Bars and Dollar

Gold prices surged higher on Friday, as the euro rebounded and the dollar lost ground. The Euro surged higher on Friday and this comes despite a dovish ECB and worse than expected growth in Germany following softer than expected PMI data. This also countered the stronger than expected jobless claims and PMI data released in the US which showed the US is still the best house on the block.

Technical Analysis

Gold prices surged higher on Friday ripping through the 20-day moving average at 1,286 which his now seen as short term support. Resistance on the yellow metal is seen near the June 2018 highs at 1,310. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal which reflects accelerating positive momentum. Negative momentum is decelerating as the MACD (moving average convergence divergence) histogram is printing in the red with an upward sloping trajectory. The MACD looks like is it poised to generate a crossover buy signal.

The ECB Sees the Risks to the Downside; Germany Cuts Its Growth Forecast

The ECB left rates unchanged and the commentary from Draghi was dovish. Its hard to see given the current economic backdrop that the ECB raised rates in 2019. While the risks are now to the downside, the ECB will wait until their staff projections are released and then make a decision.

German government cut its 2019 growth forecast to 1.0%.  This is even more pessimistic than the recent IMF revision for Germany, which cut its 2019 growth forecast to 1.3% from 1.9% previously.  The German PMI, which came out prior to the ECB decision dropped below the 50 handle which reflects contraction. IFO reported January German business confidence on Friday at 99.1 vs. 100.7 expected and was the lowest in almost three years.   A larger than expected drop in the expectations component to 94.2 was the culprit.

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
IMPORTANT DISCLAIMERS
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.
RISK DISCLAIMER
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.
FOLLOW US