Gold Price Prediction – Prices Edge Higher as the Dollar Continues to SlideThe dollar eases following Lagarde comments
Gold prices edged higher moving through resistance as the dollar moved lower along with US yields. The ECB debate over the strength of the Euro continues to move forward. ECB President Lagarde said the ECB discussed the exchange rate but agreed there was not need to overreact. This has provided traders with a green light to continue to push the dollar lower, which should help buoy the yellow metal.
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Gold prices edged higher attempting to slip through resistance near a downward sloping trend line resistance seen near 1,945. Short term support is seen near the 10-day moving average near 1,942. Additional support is seen near the 50-day moving average at 1,923. Medium-term negative momentum is decelerating as the MACD histogram is printing in the red with a rising trajectory which points to consolidation. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The relative strength index is moving sideways to higher which is a sign of accelerating positive momentum.
Lagarde said in her post-meeting press conference, that the ECB discussed the exchange rate but agreed that there is no need to overreact to its gains. She added that the bank does not target exchange rates and will evaluate the impact on inflation. This was in contrast to the ECB Chief Economist Lane who warned that same day that the strong euro has dampened the eurozone inflation outlook. He later reiterated his concerns and predicted that inflation will remain negative for the rest of the year.