Gold Price Prediction – Prices Consolidate Despite Strong European PMI Data

Rebounding US yields cap gold prices
David Becker
Gold daily chart, April 02, 2019

Gold prices traded sideways on Wednesday. Initially, prices moved higher as the dollar lost ground following stronger than expected EU PMI services and composite numbers. The dollar further declined following a softer than expected US ADP private employment report and a weaker than expected ISM services figure. Despite the softer than expected economic numbers, US interest rates moved higher led by a rebound in the 10-year yield back above 2.5%.

Technical Analysis

Gold prices continued to have a difficult time gaining traction. Prices made an attempt to push higher making a higher high and a higher low, but the range was muted and prices were unable to take out Monday’s highe. Short term resistance on the yellow metal is seen near the 10-day moving average at 1,302. Support is seen near and upward sloping trend line that connects the lows in January to the lows in March and comes in near 1,285. The 10-day moving average recently crossed below the 50-day moving average which means that a short term down trend is now in place.

Medium-term momentum remains negative. The MACD (moving average convergence divergence) index generated 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 printing in the red with a downward sloping trajectory which points to lower prices and accelerating negative momentum.

Prices are oversold. The fast stochastic is printing a reading of 12, below the oversold trigger level of 20 which could foreshadow a correction. The fast stochastic also generated a crossover buy signal, which means that short term negative momentum is fading.

The EU reports stronger than expected PMI Data

The March EU services and PMI reading came in stronger than expected.  The EU services PMI was reported at 53.3 compared to expectations of a rise to 52.7. The compositive PMI hit a level of 51.6 compared to 51.3 expected. Both beat expectations and provide some lift to EU yields. Most of the improvement came from France.  Italy and Spain also showed strong improvements in the services sector which help buoy the composite readings improving to 51.5 for Italy and 55.4 for Spain.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US