Gold Price Prediction – Prices Continue to Rise as Brexit Ruling Generates Volatility

Gold prices continued to rise on Tuesday as the dollar lost ground and US yields headed south. The UK Supreme Court ruled that Johnson’s suspension of the Parliament was unlawful which whipsawed the pound and makes gold a nice alternative given the current geopolitical environment. The Euro was buoyed also helping prices gain traction following a better than expected IFO business report released on Tuesday in Germany.

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Technical Analysis

Gold prices rallied for a 3rd consecutive trading session on Tuesday and appear to be targeting the September highs at 1,556 which is resistance. The movement in gold is a classic cup and saucer breakout. Short term support is seen near the 10-day moving average at 1,504. Additional support is the 50-day moving average at 1,488. Short term momentum has turned positive as the fast stochastic continued to rise moving out of oversold territory. The upward trajectory of the fast stochastic points to rising momentum. Medium-term momentum is turning, as it appears the MACD (moving average convergence divergence) is poised to generate a crossover buy signal if prices continue to trend. 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).

UK Supreme Court announced that Johnson’s suspension of Parliament was unlawful.  The court added that Parliament has a right to a voice in the Brexit debate.  IFO reported September business climate for Germany.  The headline number rose to 94.6 versus 94.5 expected, as the drop in the expectations component to 90.8 was offset by a rise in current assessment to 98.5.