Gold Price Prediction – Prices Consolidate Ahead of Senate Vote

Gold prices rebounded from session lows forming a doji with a long tail as US yields moved lower and the dollar eases against most major currencies. Stock prices moved higher which buoyed treasury prices and lowered yields paving the way for higher gold prices. The White House believes that if the government does not open that the US economy could show no growth in the Q1 of 2019. IMF Managing Director Christine Lagarde said the IMF modestly cut its global growth forecast for 2019 to 3.5% from 3.7%.

Technical Analysis

Gold prices rebounded from session lows on Wednesday closing nearly unchanged , and just closing below resistance which was former support near the 20-day moving average at 1,284. Additional support on the yellow metal is seen near the 50-day moving average at 1,253. Momentum is negative as the MACD (moving average convergence divergence) histogram prints in the red with a downward sloping trajectory which points to accelerating negative momentum and lower prices. The fast stochastic continues generated a crossover sell signal in neutral territory which reflects accelerating positive mometum. The current reading on the fast stochastic is 29, above the oversold trigger level of 20 and in the lower end of the neutral range.

The chairman of President Donald Trump’s Council of Economic Advisers said Wednesday the United States could post no economic growth in the first quarter if the federal government does not reopen. The government in the US has been closed for 33-days and the Trump administration believes that growth will decline by 0.13% for every week the government is closed. The standoff will have a new twist on Thursday, as 2-votes will be brought to the senate floor. One will have 5.7-billion for the Presidents wall and the other will be a clean continuing resolution which will allow the government to reopen until February 8, 2019. Neither is expected to have the 60-votes needed to pass.