Gold Price Prediction – Prices Pause and are Poised to Refresh Higher

Gold prices lower on Friday and are forming a pendant pattern which is a consolidation that eventually refreshes higher. This follows a large surge in prices earlier in the week.  Riskier assets lost ground on Friday after stocks rallied for three consecutive trading sessions likely rising more than 14% for the week. US yields moved lower across the curve, which weighed on the greenback. The dollar tumbled again for the by 0.8% following Thursday per performance and settled down 3.4% for the week. This is a huge move for the dollar and it very surprising that commodities especially gold prices have not broken out on this move.  The House voted on and approved the US rescue package which is now on its way to President Trump to become law.

 

 

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Technical Analysis

 

Gold prices edge higher on Friday forming a bull pendant pattern.  Target resistance on the yellow metal is seen near the March highs at 1,700. Support is seen near the 50-day moving average at 1,589. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal and continues to accelerate higher. Medium-term momentum has also 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 also generated a crossover buy signal, moving through the zero-index level. The trajectory is upward sloping which points to higher prices.