Gold Price Prediction – Prices Consolidate Ahead of U.S. CPI

Gold prices edged lower and continue to trade sideways with an upward trajectory. The dollar edged slightly higher as U.S. yields rose on a stronger than expected increase in consumer price expectations reported on Monday by the New York Federal Reserve. The 2-year Treasury yield increased by 1.7 basis points. Tomorrow the U.S. Labor Department will report its Consumer Price Index. Expectations are for a 5% year-over-year gain, according to Bloomberg.

Technical analysis

Gold prices moved lower and remain in a tight range with an upward trending trajectory. Prices tested support near the near the 10-day moving average near 1,790. Resistance is seen near the 50-day moving average at 1,836.   Short-term momentum has flip-flopped turning positive as the fast stochastic generated a crossover buy signal. Medium-term momentum has shifted positively as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Consumer Price Expectations Hit Record

The New York Federal Reserve reported on Monday its June Survey of Consumer Expectations. The report showed that on average, consumers expected inflation to rise by 4.8% year over a year an increase of 0.8 from May and the highest reading for the survey on inflation expectations. This comes ahead of the June CPI, which is expected to rise 5% year over year.