Gold Price Prediction – Price Ease Despite Dollar Weakness as CPI Remains Tame

Gold prices slipped on Thursday despite the dollar sliding and US yields moving lower. The labor department reported that jobless claims rose more than expected while US CPI remained relatively tame. Riskier assets rebounded, but failed to buoy the yellow metal.

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Technical analysis

Gold prices rebounded on Thursday after tumbling on Wednesday. Prices are testing support near the 10-day moving average at 1,829. Resistance is seen near the 50-day moving average at 1,876.  Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 73, just below the overbought trigger level of 80.  Medium-term momentum is positive but is decelerating as the MACD (moving average convergence divergence) histogram prints in the black with a decelerating trajectory, which points to consolidation.

CPI Rose More than Expected

According to the Labor Department, the consumer price index rose 0.2% month over month after no change in October. Compared with a year earlier, the gauge rose 1.2%. The core CPI index, which excludes volatile food and energy costs, also advanced 0.2% from the prior month and increased 1.6% from a year earlier. Expectations had been for a monthly rise of 0.1%. For the 12 months, CPI was expected to rise by 1.1%.