Gold Price Prediction – Prices Consolidate as the Dollar Gains TractionFed says the policy will remain accomadative
Gold prices consolidated on Wednesday, after rising for two consecutive trading sessions to start the week. The dollar rebounded after testing lower levels which halted the upward momentum in the yellow metal. Yields moved lower and then rebounded late which also put a damper on the gold rally for the week. The FOMC said in their recent meeting minutes that policy will remain accommodative for the foreseeable future.
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Gold prices moved lower and consolidated the weekly gains. Support is seen near the near the 20-day moving average at 1,729. Additional support is seen near the June lows at 1,670. Resistance is seen near the 50-day moving average at 1,763. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum has 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 MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.
FOMC Remains Accommodative
Federal Reserve officials indicated that policy will stay in place until it produces stronger employment and inflation, and won’t be adjusted based merely on forecasts. The FOMC minutes from the March 16-17 meeting as investors looked for indications about where policy may be heading in the future. FOMC members said the $120 billion a month in bond purchases were providing substantial support to the economy.