Gold Price Prediction – Gold Surges on Surprise Central Bank Action

Momentum surges higher but prices are now overbought
David Becker
Comex Gold

Gold prices continued to rally surging higher by more than 2.3% as concerns over the US-China trade war spilled over into surprise monetary policy moves.  Three central banks cut rates more than expected on Wednesday which is a sign of weakening global growth. US yields tumbled, with the 30-year yield hitting an all-time low.  Chinese officials were on the tape on Wednesday saying that they believe they can outlast the US government with regard to the trade war. They are now willing to sit back and wait until the current tariffs begin to erode the US economy. The yuan was fixed weaker on Wednesday.  It was the highest fix for USD/CNY since 2008. PBOC officials reportedly told foreign firms earlier that the yuan won’t continue to weaken significantly.

 

Trade gold with FXTM

Regulated By:CySEC, FCA, FSC

Foundation Year:2011

Headquarters:FXTM Tower, 35 Lamprou Konstantara, Kato Polemidia, 4156, Limassol, Cyprus

Min Deposit:$10

Visit Broker

90% of retail CFD accounts lose money

90% of retail CFD accounts lose money

 

Technical Analysis

Gold prices surged higher on Wednesday and are poised to test higher levels as positive momentum continues to accelerate higher. Resistance is now seen near the March 2013 highs at 1,616. Support is seen near the 10-day moving average at 1,443. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal and continues to accelerate higher. The fast stochastic accelerated higher and is now printing a reading of 95, well above the overbought trigger level of 80 which could foreshadow a correction. Medium-term momentum has also turned positive as the MACD (moving average convergence divergence) 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 is printing in the black with an upward sloping trajectory which points to higher gold prices.

Central Banks Cut More than Expected

Policymakers in India, New Zealand and Thailand moved aggressively to support growth and inflation, all cutting interest rates by more than expected. Those moves raised concerns about the extent of the potential spillover from the trade conflicts. Reserve Bank of New Zealand surprised markets with a 50 basis point rate cut to 1.0%.  Consensus saw a 25 basis point cut. Reserve Bank of India surprised markets with a 35 basis point cut to 5.4%.  Consensus saw a 25 basis point cut. Bank of Thailand surprised markets with a 25 basis point cut to 1.5%.  Consensus saw steady rates

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

Top Promotions

Top Brokers

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