Gold Price Prediction – Prices Close at 6-year Weekly High

 

 

Gold prices moved higher on Friday finishing the week up 1.18% for the highest weekly close in more than 6-years. This week saw the Fed Chair Gerome Powell signal that the Fed would reduce interest rates in July taking back the 25-basis point increase in December of 2018. Inflation figures were released on Thursday and Friday with CPI coming out slightly higher than expected and Producer prices edging up slightly.

Technical Analysis

Gold prices rebounded late in the trading session to finishing in the black. Support on the yellow metal is seen near the 10-day moving average which comes in near 1,406. Resistance is seen near the July highs at 1,438. Short term momentum is negative as the fast stochastic accelerates lower. Medium term momentum is also neutral to negative as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory which points to lower prices.

Producer Prices Edge Higher

The US PPI index rose slightly in June as the cost of energy and other goods fell for a second straight month, offsetting an acceleration in services, leading to the smallest annual increase in producer inflation in nearly 30-months.

The Labor Department said on Friday its producer price index for final demand edged up 0.1% last month after a similar gain in May. In the 12 months through June, the PPI rose 1.7%, the smallest gain since January 2017, slowing further from a 1.8% increase in May. Expectations were for PPI to remain unchanged increasing 1.6% on a year-on-year basis. Underlying producer prices slowed last month, a sign that overall inflation could remain moderate despite strong gains in prices of most consumer goods and services in June. Excluding the volatile food, energy and trade services components, producer prices were unchanged in June after rising 0.4% for two straight months. The core PPI increased 2.1% in the 12 months through June after advancing 2.3% in May.