Gold Price Prediction – Prices Edge Higher as Dollar Eases

Gold prices edged higher sliding through key resistance but still faces additional upside pressure. US yields moved lower and the dollar lost ground especially against the Euro but the decline in the US dollar failed to buoy the yellow metal. The Bundesbank reported that growth in German would likely remain subdued during the Q4 of 2019.

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Technical Analysis

Gold prices edged above resistance near the 10-day moving average at 1,468, but still faces a difficult task in eclipsing the  100-day moving average at 1,479. Support on the yellow metal is seen near the 10-day moving average and then the November lows at 1,445 and then the October lows at 1,426.  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 turned positive. The fast stochastic generated a crossover buy signal. The current reading on the fast stochastic is 34 accelerating from below the oversold trigger level, which points to higher prices. Medium-term momentum is negative to neutral as the MACD histogram is printing in the red with a rising trajectory which points to consolidation.

Bundesbank Warned of German Growth Stagnation

The Bundesbank warned of subdued growth to the German economy in Q4.  The warning comes after Germany posted stronger than expected growth in Q3.  The bank noted cautious signs that the manufacturing slump may be easing. Despite the softer than expected outlook the market continued to buoy the Euro as US yields slide. Separately, China unexpectedly cut the 7-day reverse repo rate by 5-basis points to 2.5%, the first since 2015.