Gold Price Prediction – Prices Consolidate as Geopolitics Begins to Rise

Gold forms doji day
David Becker
Gold Bars and Dollar

Gold prices were range bound on Monday, as the dollar was mixed, despite rising US yields. A very small uptick in the GDP Now growth model buoyed yields. Atlanta Federal Reserve President Raphael Bostic said he does not see the central bank cutting interest rates. Gold should be experience a safe haven bid given the turn of events that have recently occurred in Europe. In Austria, Vice Chancellor Strache has resigned after a compromising tape was released.  Tensions in Italy’s coalition government appear to be growing with differences of opinion between the ruling Lega party.

Technical Analysis

Gold prices moved sideways in a very tight range, holding up just above trend line support which comes in near 1,273. Short term resistance is seen near the 10-day moving average at 1,286, and then the 50-day moving average at 1,290. Short term momentum remains negative as the fast stochastic continue to move lower, with a downward sloping trajectory. Medium term momentum is about to turn negative as the MACD (moving average convergence divergence) index is poised to generate a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is also poised to generate a crossover sell signal of the zero index level.

Gold Should Be Experiencing Some Safe Haven Bid

Gold should be experiencing a minor safe haven bid as geopolitics in Europe rises. The offset is the decline in the value of the Euro which will weigh on gold prices. In Austria, Vice Chancellor Strache resigned. This allowed Chancellor Kurz to call for new elections this fall.  Tensions in Italy’s coalition government appear to be growing with differences of opinion between the ruling Lega party and 5 Star Movement diverging. The alliance between the right-wing Lega and anti-establishment is generating volatility.

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