Gold Price Prediction – Prices Consolidate Over US Holiday

Gold prices were nearly unchanged on Monday likely due to the US Memorial Day holiday. US markets were closed, which kept the dollar in check and US yields stable.   The EU held elections from Thursday to Sunday which showed movement away from the center left and center right.

Technical Analysis

Gold prices edged higher on Monday and continued to rebound into the close the trading session. Resistance is seen near the 10-day moving average at 1,283, and then the 50-day moving average at 1,283. Medium term momentum has turned positive as the MACD (moving average convergence divergence) index 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 (the 9-day moving average of the MACD line). The MACD histogram also generated a crossover buy signal as it closed through the zero index level which reflects accelerating positive momentum. The fast stochastic has also generated a crossover buy signal which reflects short term accelerating positive momentum. The current reading of 43 on the fast stochastic is on the lower end of the neutral range.

European Elections Fail to Move Gold

The European elections for the EU were held during the weekend. The results showed that the center right and center left groups lost their majority. The turnout to vote was much larger than expected, notching up a 20-year high. This helped the pro-EU parties as the Euro skeptics are helped with low turnout. On Monday, the parties will begin to attempt to form coalitions. Established parties in Germany which make up most of the center, also took a drubbing.