Gold Price Prediction – Prices Rally on Slip in Confidence
Gold prices surged higher on Friday following an unexpected decline in consumer sentiment. The decline in confidence immediately weighed on U.S. yields which inturn generated headwinds for the U.S. dollar This came despite a Reuters poll that shows that most economists believe that the Fed will begin tapering in September. U.S. Import prices were less than expected taking some of the steam out of the rally in bond yields.
Gold prices surged higher on broad dollar weakness, pushing through short-term resistance near the 10-day moving average. Target support is seen near the March lows at 1,677. Resistance is seen near an upward sloping trend line that comes in at 1,787. Short-term momentum has turned positive as the fast stochastic generated crossover buy signal. Medium-term negative momentum is decelerating as the MACD histogram is printing in negative territory with a rising trajectory which points to consolidation.
The spread of the delta variant of the COVID-19 virus is taking its toll on confidence. The consumer sentiment index tumbled to 70.2 in its preliminary August reading. That figure is down more than 13% from July’s result of 81.2 and below the April 2020 mark of 71.8 that was the lowest of the pandemic era. It was the lowest reading for the measure since 2011. Expectations had been for a reading of 81.3 for August.