Gold Price Prediction – Prices Edge Higher Generating a Dead Cat Bounce
Gold prices edged higher generating a dead cat bounce after tumbling on Wednesday. The dollar continues to rally versus most major currencies, as yields in the US continue to outpace yields in Europe and Japan. The DXY which is the dollar index, hit a fresh 2-year high on Thursday which should continue to weigh on gold prices. The Senate voted Thursday to pass a temporary funding bill and avoid a government shutdown at the end of the month. This took some of the lust off of the yellow metal.
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Technical Analysis
Gold prices edged higher generating a dead cat bounce hovering just above support near the 10-day moving average at 1,505. Additional support is the 50-day moving average at 1,491. Resistance is seen near the weekly highs at 1,535. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal in the middle of the neutral range. Medium-term momentum looked to be turning, and it appeared the MACD (moving average convergence divergence) is poised to generate a crossover buy signal if prices continue to trend. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD crossover has been halted which could point to consolidation.
Senate Approved Continuing Resolution
The chamber approved the legislation by an 82-15 margin. As the House already passed the measure, the Senate vote sends it to President Donald Trump for his signature. He is expected to sign it into law before the funding deadline. The continuing resolution funds the government through November 21, setting up another potential showdown over spending just a week before Thanksgiving. Gold prices will likely be volatile ahead of this date.
