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Gold Price Prediction – Prices Move Higher in Sideways Trade
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Gold prices edged higher on Monday as riskier assets came under pressure. The US dollar moved higher but failed to generate headwinds for the yellow metal.
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.
About the Author
David Beckerauthor
David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.
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