Gold Price Prediction – Prices Rise as Consumer Spending Increases
Gold prices rebounded on Friday as traders began to incorporate the Fed’s new policy which is focused on inflation. Recall, on Thursday Federal Reserve Chair Jerome Powell, announced a major policy shift were the central bank will allow inflation to run hotter than normal to support the labor market and broader economy. The announcement came at the virtual Jackson Hole symposium. The dollar moved lower on Friday despite rising US yields, which helped to pave the way for higher gold prices.
Trade gold with FXTM
Gold prices rose on Friday as the dollar moved lower but then reversed and ended the session in the red. Resistance is seen near the 10-day moving average at 1,948. Target support is seen near the 50-day moving average at 1,880. Medium-term momentum remains negative as the MACD histogram is printing in the red with a sliding trajectory which points to lower prices. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The relative strength index has also turned higher reflecting decelerating negative momentum.
Consumer Spending Rose
U.S. consumer spending increased by 1.9% last month according to the Commerce Department. The July gain marked the third straight monthly increase in consumer spending, the primary driver of the U.S. economy, but represented a slowdown from the previous two months. Friday’s report from the Commerce Department also showed that income rose 0.4% in July after two months of declines.