Gold Price Prediction – Prices Edge Higher but Finish the Week in the Red

Gold prices edged higher but prices remain rangebound. For the week prices were down 0.75%. Gains in the greenback continue to weigh on the yellow metal. U.S. long-term yields edge lower.  Consumer spending dropped after rising sharply in January. This weighted on long-term US yields and helped buoy the yellow metal.

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Technical analysis

Gold prices edged higher continue to trade in a tight range. Prices were unable to recapture resistance near the 10-day moving average at 1,734. Target resistance is now seen near the 50-day moving average at 1,785. Additional support is seen near the June lows at 1,670.   Short-term momentum has flipped and is now negative as the fast stochastic generated a crossover sell signal, just above the oversold trigger level, and has now moved lower.  The current reading on the fast stochastic is 76, just below the overbought trigger level of 80, foreshadowing a correction. Medium-term momentum has turned positive. The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Consumer Spending Fell

Consumer spending, dropped 1.0% in February after rebounding 3.4% in January, according to the Commerce Department. That was the largest drop since April 2020. Personal income tumbled 7.1% after surging 10.1% in January. Expectations had been for consumer spending to decrease 0.7% in February and income would decline 7.3%. Unseasonably harsh weather in February, including severe winter storms in Texas, depressed homebuilding, production at factories, orders and shipments of manufactured goods last month.