Gold Price Prediction – Prices Edge Lower and Remain Overbought

Gold prices edged lower and were unable to pierce through resistance.  The dollar moved higher as yields continued to trend upward, putting downward pressure on the yellow metal. Inflation continues to be the main topic for the GOP. The party is focusing on how low-income American’s are hurt more by higher prices.

Technical analysis

Gold prices remained near a 5-month high but were unable to break through trend line resistance near a downward sloping trend line that comes in near 1,866. Target resistance is seen near the June highs at 1916. The 10-day moving average has crossed above the 50-day moving average which means a short-term uptrend is now in place. Prices are overbought as the fast stochastic is printing a reading of 95, well above the overbought trigger level of 80. Medium-term momentum has also turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD line). The MACD histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

The NY Fed Manufacturing Survey was Stronger than Expected

The New York Fed’s Empire State manufacturing business conditions index rose 11.1 points to 30.9 in November, the regional central bank reported. Expectations were for reading near 22.  Any reading above zero indicates improving conditions.The new-orders index rose 4.5 points in November to 28.8, and the shipments index soared 19.3 points to 28.2. Unfilled orders slipped and delivery times lengthened.