Gold Price Prediction – Prices Move Higher in Sideways Trade

Gold volatility, as reflected by the Gold VIX moved higher and continues to hover near the 27% level. The big story of the day in the commodity space was the sharp drop in oil prices which declined below zero and settled near -$37. This would mean a producer would need to pay a transportation company $37,000 to take away oil from a field.

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Technical Analysis

Gold prices moved higher but continued to consolidate above support near the 10-day moving average at 1,688 . Resistance is now seen near the April highs at 1,747. Target resistance near the August 2012 highs near 1,791. Prices appear to have rebounded at the 10-day moving average at 1,685. Short term momentum has turned negative as the fast stochastic generated a crossover sell signal. This happened as the fast stochastic is printing a reading of 76, coming from oversold levels which could foreshadow a continuation of a correction. Medium-term momentum remains positive and has started to consolidate as the MACD (moving average convergence divergence) histogram is still printing in the black with a declining trajectory which points to consolidation.