Gold Price Prediction – Prices Consolidate Following ECB and Fed Chair Comments

Gold prices consolidated in tandem with the US dollar as yields took a break from their rapid rise. The ECB said it stands ready to inject liquidity into the market, which would weigh on the Euro. Fed Chair Powell said that Congress and the White House need to agree on additional stimulus otherwise the US economy could be in danger.

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Technical analysis

Gold prices consolidated on Tuesday after rallying on Monday easing slightly above support near the 10-day moving average at 1,888. Resistance is seen near the 50-day moving average at 1,943.   Medium-term momentum has turned positive as the MACD (moving average convergence divergence) 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. Short-term momentum has turned positive as the fast stochastic recently generated a crossover buy signal. The current reading on the fast stochastic is 48, rebound from the oversold trigger level of 20 which is a sign of accelerating positive momentum.

The ECB is ready to Add to its Stimulus

The ECB’s Legarde said that the central bank stands ready to inject fresh stimulus into the Eurozone economy. An economic recovery that appears shaky is a concern now that the second wave of Covid-19 infections has hit countries like France and Spain.  Federal Reserve Chairman Jerome Powell called Tuesday for continued aggressive fiscal and monetary stimulus for an economic recovery.