Gold Price Prediction for January 4, 2018

Gold prices reversed course as the dollar gain traction following the Fed Minutes and a stronger than expected ISM Manufacturing report. Prices equaled Tuesday’s highs but closed lower above support near the October highs at 1,305.  Additional support is seen near the 10-day moving average at 1,292.  Resistance is seen near the September highs at 1,357. Prices remain overbought and while the RSI moved lower reflecting decelerating positive momentum, the current reading is above the 70-overbought trigger level which could foreshadow a correction.

FOMC Minutes Left Markets Unchanged

The FOMC meeting minutes came out in line with expectations with central bank members seeing growth and wages rising but overall inflation remaining flat.  The FOMC said that the tax cuts could lead to a faster rate of increases in the Fed Funds rate. The committee saw that the risks to the economy were balanced, but some saw the dot plots pointing to higher rates as too aggressive, given the current rate of inflation.