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David Becker
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Gold prices continued to consolidate on Wednesday after hitting resistance. The dollar gained traction as the 10-year yield retraced some of its recent gains. U.S. CPI rose in line with expectations, according to the Labor Department. The House of Representatives moved forward with a vote on the second impeachment of President Donald Trump.

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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. 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.

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U.S. CPI Rises

U.S. consumer prices rose in December, driven by gains in gasoline, though underlying inflation remained tame. According to the Labor Department, its consumer price index increased 0.4% last month after gaining 0.2% in November. On a year over year basis, the CPI advanced 1.4% after rising 1.2% in November. Both the month over month and year over year reports were in line with expectations. Excluding the volatile food and energy components, the CPI edged up 0.1% after climbing 0.2% in November.

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