Gold Price Prediction for January 16, 2018

Gold prices moved higher on Monday but with the U.S. closed for the MLK Holiday, volume was light.  The weakness in the dollar has buoyed gold prices as gold is quoted in dollars and a weaker dollar makes gold more attractive in other currencies.

Prices Are Poised to Test Higher Levels

Gold prices broke out of a bull flag continuation pattern, and are now poised to test resistance near the September highs at 1,352.  Support on the yellow metal is seen near the 10-day moving average at 1,321.  Momentum on gold remains positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices. The RSI (relative strength index) also moved higher with price action reflecting accelerating positive momentum, but the current reading of 74, is above the overbought trigger level of 70 and could foreshadow a correction.