Gold Price Prediction for May 24, 2017

Gold prices moved higher as stronger than expected European data buoyed yields which paved the way for lower gold prices.  Gold generated an outside day, with a higher high and a lower low and lower close which is a reversal pattern.  Support is seen near the 10-day moving average at 1,242.  A break of this level would lead to a test of an upward sloping trend line at 1,221.  Momentum is neutral with the RSI (relative strength index) flatlining printing a reading of 51, which is in the middle of the neutral range and reflects consolidation.

German Manufacturing Surged

German manufacturing PMI jumped higher to 59.4 from 58.2 in the previous month, while the services reading fell back marginally to 55.2 from 55.4. The long end of the Easter effect may have still impacted the numbers, but overall the data, which left the composite at 57.3, up from 56.7 in April, backs the Bundesbank’s assessment that growth remains strong in the second quarter.