Gold Price Prediction – Prices Consolidate with Bond Market Holiday

Gold prices consolidated as the dollar was mostly higher. While the greenback could not gain ground against the Euro, it broke out against the yen, helping to weigh on gold.  U.S. yields were unchanged on Monday as the U.S. bond market is closed for a partial holiday. Equities continued to trade along with commodities. The sideways price action in the yellow metal is likely a function of the confusion in the marketplace as to the direction of the Federal Reserve. Friday’s mixed jobs report, which showed a softer than expected increase in the number of jobs created combined with higher than expected wage gains, has generated sideways price action.

Technical analysis

Gold prices edged lower as the dollar roared. Resistance is seen near the 50-day moving average at 1,778. Support is seen near the 10-year moving average at 1,753. Short-term momentum is positive as the fast stochastic recently generated a crossover buy signal. 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 is printing in positive territory with an upward sloping trajectory which points to higher prices.