Gold Price Prediction – Prices Fall, as Riskier Asset Gain Traction

Gold prices moved lower on Tuesday, following a long holiday weekend in the US. As riskier assets like stocks gained traction, safe-haven gold seemed to ease. The dollar got hammered which failed to buoy gold prices as the uptick in the US 10 year yield seemed to weigh on the value of the yellow metal. Bank of England Chief Economist Haldane confirmed that the central bank is still reviewing negative rates.  The Peoples Bank of China continued to let the yuan drift falling to the weakest level since early 2008.

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Technical analysis

Gold prices moved lower, and continued to trade sideways unable to break down, after hitting a fresh 7.5-year high last week.  Prices fell below support near the 10-day moving average at $1732, which is now seen as resistance. Target support is an upward sloping trend line that comes in near $1,693. Short-term momentum has turned negative as the fast stochastic recently generated a crossover sell signal in overbought territory. Medium-term momentum has also turned negative as the MACD (moving average convergence divergence) index recently 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). The MACD histogram has also generated a crossover sell signal. The histogram is printing in the red with a declining trajectory which points to lower prices.

US Housing Prices Continue to Rise

US home-price appreciation continued to rise in March. The S&P CoreLogic Case-Shiller 20-city price index posted a 3.9% year over year gain in March, up from 3.5% the previous month. On a monthly basis, the index increased by 0.5% between February and March.

For a look at all of today’s economic events, check out our economic calendar.