Gold Price Prediction – Prices Grind Higher as the Dollar Drops

Gold prices continued to grind higher on Thursday, bouncing near trend line support which was former resistance. The upward move came along with a drop in the dollar following a smaller than expected rise in U.S. GDP. The ECB kept interest rates unchanged and kept their bond purchase program steady. The market is now looking for the ECB to begin to unwind its quantitative easing in December

Technical analysis

Gold prices bounced higher and held above trend line resistance which is now support at 1,785. Additional support is seen near the 10-day moving average at 1,785. Resistance is seen near the September highs at 1,830. The 10-day moving average crosses above the 50-day moving average, which means a short-term uptrend will be in place. Short-term momentum turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. 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 histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

The ECB Kept Rates Unchanged

The ECB kept interest rates unchanged, and also kept their bond purchase program in check. The markets are now pricing in a move toward an unwind of quantitative easing in December. The ECB now sees inflation expectations moving to 2.2% in 2021 and then declining to 1.7% in 2020.