Gold Price Prediction – Prices Consolidate as Inflation Trends Higher

Gold prices continued to consolidate on Tuesday, unable to make headway going higher and hitting resistance. The dollar started to ease after rallying Monday as the 10-year yield edged slightly higher. Oil and food prices are moving higher, which is a sign of inflation that puts downward pressure on U.S. treasury prices. U.S. health officials are releasing second doses of coronavirus vaccines that had been held back for booster shots and administering the vaccine to anyone over age 65 and people with pre-existing health conditions. Online sales surged to the highest level on record during the holiday season in the U.S.

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Technical analysis

Gold prices moved sideways, consolidating, unable to gain headway and running into resistance near the  50-day moving average near 1,867. Support is seen near an upward sloping trend line that comes in near 1,815.  Short-term momentum has turned negative as the fast stochastic continues to accelerate lower. The current reading on the fast stochastic is 18, below the oversold trigger level of 20, foreshadowing a correction. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) line generated a crossover sell 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 MACD histogram is printing in the red with a downward sloping trajectory, which points to lower prices.

American’s Spend a Record on Online Sales

U.S. online purchases during the holiday season surged 32.2% from 2019, totaling a record $188.2 billion according to Adobe Analytics. During November, E-commerce sales included Black Friday and Cyber Monday, reached $100 billion for the first time. Groceries, appliances and books surged in popularity around the holidays, while online sales of toys were up 50% from 2019, and the jewelry category was up 66%.