Gold Price Prediction – Prices Edge Higher but Remain Rangebound

Gold prices edged higher for the second consecutive trading session despite a sharply rebounding dollar and lower US yields. Since gold is priced in US dollars, generally as the dollar rises, it generates headwinds for gold prices. Additionally, US import prices came in at a 5-month low, which shows that inflation expectations are sliding.

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Technical analysis

Gold prices rebounded for a second consecutive trading session. Prices recapture short term support is seen near the 10-day moving average at 1,902. Resistance is seen near the 50-day moving average at 1,930. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal on the upper end of the neutral range. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. The MACD histogram also generated a crossover buy signal rising above the zero-index line. Gold continues to trade sideways and needs a catalyst like either the dollar rallying or falling to drive volatility.

US Import Prices Rose in Line with Expectations

U.S. import prices rose 0.3% in September according to the Labor Department. This was the smallest gain in five months. Expectations were for import prices, to rise by 0.3% in September. Import prices fell 1.1% after decreasing by 1.4% in August on a year over year basis. Excluding fuel, prices of imported goods climbed 0.6%. U.S. export prices increased by 0.6% in September. The cost of oil fell 2.9% last month, reflecting the first decline since April.v