Gold Price Prediction – Prices Consolidate and are Poised to Refresh Higher
Gold prices moved lower for a second consecutive trading session and continue to form a bullish pendant pattern which is a consolidation pattern that eventually refreshes higher. This follows a large surge in prices last week. Riskier assets traction on Monday recapturing the losses seen on Friday. US yields moved higher across the interest rate curve, as the dollar gained traction. This follows a sharp downdraft on the dollar last week that saw the greenback fall 3.4%. The rescue package passed by lawmakers should begin to provide some relief beginning this week for small businesses.
Trade gold with FXTM
Gold prices moved lower on Monday but continued to form a bull pendant pattern. Target resistance on the yellow metal is seen near the March highs at 1,700. Support is seen near the 50-day moving average at 1,590. Short term momentum is moderating as the fast stochastic begins to move toward the signal line reflecting consolidation. Medium-term momentum has also turned positive 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 also generated a crossover buy signal, moving through the zero-index level. The trajectory is upward sloping which points to higher prices.
The Fed Sees a Huge Rise in Unemployment
The Fed’s St. Louis district project total employment reductions of 47 million, which would translate to a 32.1% unemployment rate. The projections are even worse than St. Louis Fed President James Bullard’s much-publicized estimate of 30%. They reflect the high nature of at-risk jobs that ultimately could be lost to a government-induced economic freeze aimed at halting the coronavirus spread.