Gold Price Prediction – Prices Consolidate Following ECB Decision

Gold prices edged higher on Thursday but remain below key resistance levels. The yellow metal was able to remain buoyed as the dollar dropped and the Euro rallied following the ECB decision. The key item was Lagarde arguing to the market that a decision to slow the pace of asset buying under the institution’s pandemic emergency program didn’t amount to tapering.

Tecnical analysis

Gold prices consolidated edged higher. Prices remained below resistance seen near the 50-day moving average, at 1,797. Additional resistance is seen near the 10-day moving average at 1,809. Target support is seen near the August lows at1,672. Short-term momentum has reversed and turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This sell signal 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 ECB Keeps Rates Unchanged

The European Central Bank kept its monetary policy unchanged but opted to slow down the pace of asset purchases under its pandemic emergency purchase program. The ECB voted to maintain the interest rate on the ECB’s refinancing operations at 0%, on the marginal lending facility at 0.25% and on the deposit facility at -0.5%. Lagarde was quoted by several news services as saying that the Lady is not Tapering.