Gold Price Prediction – Prices Continue to Slide as Negative Momentum Accelerates

Gold prices continued to edge lower as the dollar gained traction on Monday, and US yields were range bound. Positive sentiment that a trade deal will come through, helped buoy riskier assets and the greenback. The German IFO survey came out in line with expectations which shows that the German economy is stabilizing. Slowly the safe-haven bid that helped buoy gold prices for most of 2019, is exiting as volatility in the capital markets slows. Recall, gold prices rallied a robust 4.75% in December of 2018 which is likely in the back of many traders’ minds and is probably keeping gold prices buoyed.

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Technical Analysis

Gold prices started to accelerate lower, after attempting to test resistance near the 10-day moving at 1,465. Additional resistance is seen near the  100-day moving average at 1,482. Support is seen near the November lows at 1,443. A breakdown below this level would lead to a test of the August lows at 1,400. The 10-day moving average crossed below the 100-day moving average which would show that a short-term downtrend is in place. Short term momentum has reversed and turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is neutral and turning negative as the MACD (moving average convergence divergence) histogram is accelerating lower after moving toward the zero-index level.

German IFO Come out in Line with Expectations

The German IFO survey came out as expected, providing further evidence that the German economy is beginning to gain traction. The headline business climate survey was 95.0, while the expectations component was 92.1 and the current assessment component was 97.9, all higher than the previous month.