Gold Price Prediction – Prices Reverse on Strong Treasury Yields Gains

Gold prices reversed lower, hitting resistance as the dollar was mixed against most major currencies. U.S. yields surged higher which seemed to put upward pressure on the dollar versus the yen and downward pressure on the yellow metal. Since gold is priced in dollars, a stronger greenback usually translates into lower gold prices. Retail sales in the U.S. were stronger than expected, while import prices surged.

Technical analysis

Gold prices reversed and moved lower after testing a downward sloping trend line that comes in near 1,800. Prices found support near the 10-day moving average at 1,776. Short-term momentum turned negative as the fast stochastic generated a crossover sell signal. Gold prices moved out of oversold territory and are in the middle of the neutral range.. 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 but the upward sloping trajectory is decelerating, which points to consolidation.

Retail Sales Unexpectedly Rise

Retail sales for the month increased by 0.7%, versus expectations that sales in September would decline 0.2%. Excluding auto-related sales, the number rose 0.8%, better than the 0.5% forecast. Compared with a year ago, sales were up 13.9% on the headline number and 15.6% excluding autos. Online sales rose 0.6% for the month, while auto sales increased 0.5% despite inventory problems.