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Gold Price Prediction – Prices Consolidate at 7-Year Highs

By:
David Becker
Published: Apr 24, 2020, 18:52 UTC

Durable goods orders drop

Gold Price Prediction – Prices Consolidate at 7-Year Highs

Gold prices attempted to close higher but traders took profits as gold prices tested 7-year highs. A softer than expected durable goods orders weighed on US yields which in turn generated headwinds for the US dollar. Gold has been trading in tandem with riskier assets and is poised to test higher levels. The technicals are positive as gold prices hit a fresh 7-year closing high.

 

Technical analysis

 

Gold prices consolidated after surging during the week rising 2.5% and closing at a weekly 7-year high.  The next level of target resistance is the April high at $1,747. After that level, gold could rally to $1,921. A break of this 2011 level would lift gold into blue sky territory. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal in the middle of the neutral range. The RSI moved higher in tandem with price action reflecting accelerating positive momentum. The MACD (moving average convergence divergence) index stabilized and started to accelerate higher which reflects accelerating medium-term momentum.

Durable Goods Orders Declined

US headline orders designed to last at least three years were down 14.4% in March, the biggest monthly drop since August 2014. New orders for aircraft and parts fell by more than $16.3 billion in March from February, a 296% decline, according to the Commerce Department. Since orders are recorded on a net basis, the figure incorporates canceled orders. New orders for automobiles and parts fell 18.4% in March. Excluding transportation, orders were down a more modest 0.2%. New orders for nondefense capital goods excluding aircraft,a closely watched proxy for business investment, were up 0.1%.

About the Author

David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.

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