Gold Price Prediction – Prices Edge Lower as the Dollar Continues to Rise

Gold prices edged lower consolidating as the dollar continued to gain traction. US yields moved sideways. Stronger than expected US Durable goods orders helped to continue to buoy the greenback. Since gold is priced in dollars, a stronger dollar weighs on gold prices.

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Technical analysis

Gold prices moved sideways and held above support near the 100-day moving average at 1,842. Resistance is seen near the 10-day moving average at 1,914. The 10-day moving average crossed through the 50-day moving average which means a short-term downtrend is in place. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). Short-term momentum is negative as the fast stochastic recently generated a crossover sell signal. The current reading on the fast stochastic is 11, below the oversold trigger level of 20 which could foreshadow a correction.

Durable Goods Orders Rise More than Expected

US Durable Goods Order rose 0.4% in August after jumping 11.7% in July. Expectations were for a small decline. Durable goods orders were supported by a 0.5% rise in orders for transportation equipment. Orders for non-defense capital goods excluding aircraft, rose 1.8% last month, according to the Commerce Department. Data for July was revised up to show that core capital goods orders rose 2.5% instead of 1.9% as previously estimated.